Ivm 


THE  LIBRARY  OF  THE 

UNIVERSITY  OF 

NORTH  CAROLINA 


FROM  THE  LIBRARY  OF 

ALEXANDER  B.  ANDREWS 

Class  of  1893 

TRUSTEE  OF  THE  UNIVERSITY 

FRIEND  OF  THE  LIBRARY 


CB 

L287L, 


UNIVERSITY  OF  N.C.  AT  CHAPEL  HILL 


00032695851 


This  book  must  not 
be  taken  from  the 
Library  building. 


SKETCH  OF  THE  LIFE 


OP 


J.    F.    D.    LANIER 


(Printed   for  the   use   of  his    Family   only.) 


N  E  W     Y  O  R  K  . 

1870. 


TO  MY  CHILDREN. 


In  the  following  pages  I  hare  2}^pared  for  you  a 
brief  sketch  of  some  of  the  leading  events  of  my  Life, 
believing  that  I  can  leave  to  you  no  legacy  more  accept- 
able. 


<s0 


I  was  born  in  Washington,  in  the  County  of  Beaufort,  in 
the  State  of  North  Carolina,  on  the  22d  day  of  November, 
1800.  My  father  was  Alexander  Chalmers  Lanier.  His 
mother's  maiden  name  was  Sarah  Chalmers.  She  was  nearly 
allied  to  the  family  of  Chalmers  in  Scotland,  of  which  Dr. 
Chalmers,  the  celebrated  divine,  was  afterward  a  member. 
It  was  this  connection  that  gave  my  father  his  middle  name. 
My  mother  was  a  native  of  Virginia.  Her  maiden  name 
was  Drusilla  Doughty. 

Mv  first  paternal  ancestor  in  this  country  was  Thomas  La- 
nier, a  Huguenot  of  Bordeaux,  France,  who  was  driven  out  of 
that  country  by  religious  persecution,  near  the  middle  of  the 
seventeenth  century.  He  went  first  to  England,  and  came 
from  that  country  to  this,  either  in  company  with,  or  about 
the  time  that  John  Washington,  the  ancestor  of  George  Wash- 
ington, emigrated  to  it.  He  subsequently  married  Elizabeth, 
a  daughter  of  John  Washington,  and  ultimately  settled  in 
North  Carolina.  In  his  native  country  he  was  a  man  of 
high  social  position,  and  possessed  a  large  estate,  a  consider- 
able portion  of  which  he  contrived  to  bring  away  with  him, 


6 

although  confiscated  by  law.  He  also  brought  with  him  a 
portion  of  the  family  furniture  which  was  long  retained  by 
his  descendants  as  interesting  and  valued  heirlooms.  His 
children  were  Richard,  Thomas,  James,  Elizabeth  and  Samp- 
son Lanier.  It  was  from  the  first-named  that  our  branch  of 
the  family  descended.  His  children  were  Lewis,  Buckner, 
Burrill  and  Winifred.  Lewis,  our  ancestor,  married  a  Miss 
Ball,  a  sister  of  the  mother  of  General  Washington.  He 
was  my  great-grandfather.  His  son,  James  Lanier,  was  my 
grandfather.  My  account  of  the  emigration  of  our  ancestor 
to  this  country,  and  of  his  marriage  into  the  Washington 
family,  is  derived  from  a  statement  of  the  late  George  Wash- 
ington Parke  Custis,  the  grandson  of  Mrs.  General  Washing- 
ton, taken  from  the  records  of  the  Washington  family  in  his 
possession.  The  marriage  of  my  great-grandfather  with  a 
sister  of  the  mother  of  General  Washington  is  a  well  estab- 
lished tradition  in  our  family,  but  I  possess  no  authentic 
record  of  the  fact. 

My  grandfather,  James  Lanier,  was  a  planter.  He  was 
well  educated,  a  cultivated  gentlemen,  energetic  and  public- 
spirited,  and  took  an  active  part  in  the  war  of  the  Independ- 
ence, serving  through  the  whole  of  it  as  captain  in  Col.  Wil- 
liam Washington's  regiment  of  light  cavalry  which  was  par- 
ticularly distinguished  for  its  efficient  service.  He  was  in 
the  battles  of  Eutaw  Springs,  Guilford  Court  House,  the  Cow- 
pens  and,  I  believe,  of  King's  Mountain.  These  were  among 
the  most  brilliant  achievements  of  the  war.  He  also  served 
as  captain  in  General  Wayne's  expedition  against  the  North- 
western Indians,  in  1794,  which  not  only  avenged  the  defeat 
of  General  St.  Clair,  but  completely  destroyed  their  power, 
and  for  the  first  time  gave  peace  to,  and  prepared  the  way 
for  the  future  settlement  of,  the  great  Mississippi  Valley. 


In  1789,  I  think,  my  grandfather  moved  to  Nashville,  Ten- 
nessee. The  South-west  was  then  just  coming  into  notice. 
Among  the  immigrants  into  that  section  was  General  Andrew 
Jackson,  afterward  so  famous  in  the  history  of  the  country. 
For  some  time  after  his  arrival  at  Nashville  he  was  an  inmate 
of  my  grandfather's  family.  My  grandfather  subsequently, 
about  1791,  removed  to  Bourbon  County,  Kentucky,  of 
which  he  was  soon  appointed  Prothonotary,  or  County  Clerk. 
From  thence  he  moved  to  Pendleton  County,  Kentucky, 
where  he  passed  the  remainder  of  his  days. 

Soon  after  my  birth,  my  father  moved  to  Bourbon  County, 
Kentucky.  He  invested  his  property  in  lands,  and  lost  it 
by  defect  of  title,  with  which  much  of  the  real  estate  of  that 
State  was  tainted,  and  which  produced  wide-spread  disaster 
and  ruin.  In  consequence  of  these  losses,  he  moved,  in  1807, 
to  the  town  of  Eaton,  in  Preble  County,  Ohio.  Upon  reach- 
ing this  State,  he  manumitted  two  valuable  family  slaves,  the 
only  ones  he  held,  being  prohibited  from  doing  so  in  Ken- 
tucky by  the  laws  of  the  latter.  He  had  the  satisfac- 
tion of  seeing  them  both  useful  and  respected  in  their  new 
condition  of  freedom.  I  have  alwaj^s  greatly  valued  this 
act  of  my  father,  as  these  slaves  constituted  quite  a  portion 
of  his  property.  The  act  was,  however,  only  in  harmony 
with  his  whole  character. 

For  a  considerable  portion  of  the  time  that  my  father  re- 
sided at  Eaton,  he  was  clerk  of  the  courts  of  the  county. 
Upon  the  breaking  out  of  the  war  of  1812,  he  entered  the 
army  and  served  during  the  whole  of  it.  He  served  under 
General  Harrison,  with  the  rank  of  Major,  in  his  north-west- 
ern campaigns,  and  had  in  charge  a  long  line  of  defences, 
extending  westerly  from  Lake  Erie,  and  following  up  the 
valley  of  the  Maurnee,  the  most  important  of  which  was 
Fort  Wayne,  situated  on  a  narrow  neck  of  land  separating 


the  waters  flowing  into  Lake  Erie  from  those  flowing  into 
the  Grulf  of  Mexico,  and  named  in  honor  of  General  Wayne 
and  in  commemoration  of  his  celebrated  north-western  cam- 
paign in  which  my  grandfather  served.  Upon  the  site  of  the 
fort,  erected  in  the  last  century  for  the  purpose  of  preventing 
the  incursions  of  hostile  savages,  has  grown  up  one  of  the 
most  flourishing  towns  in  the  West,  which  has  now  become 
the  centre  of  a  vast  system  of  railroads,  the  most  important 
of  which  is  the  Pittsburg,  Fort  Wayne  and  Chicago.  By  a 
sing  alar  coincidence,  the  very  ground  which  my  father  and 
grandfather  periled  their  lives  to  wrest  from  savage  tribes,  I 
have  labored  long  and  earnestly,  though  in  a  different  way, 
to  improve  and  enrich  by  the  arts  of  peace,  and  thus  to  com- 
plete their  work.  The  territory  once  so  remote  and  inac- 
cessible, and  whose  forests  were  the  covert  for  the  treacher- 
ous Indian  has,  through  the  instrumentality  of  the  railway, 
been  brought  within  easy  distance  of  Eastern  markets,  and 
is  now  one  of  the  most  populous,  nourishing  and  prosperous 
portions  of  the  West. 

While  at  Eaton  I  attended  the  village  school  for  about 
eighteen  months.  It  was  kept  by  a  Mr.  Stevens,  who  taught 
only  the  rudiments  of  an  English  education.  While  there  I 
served  as  clerk  in  the  store  of  a  Mr.  Cornelius  Van  Ausdall, 
an  immigrant  of  Dutch  descent  from  Hagerstown,  Maryland, 
and  a  very  worthy  man.  I  believe  he  is  still  living.  I  have 
always  looked  upon  my  service  with  him  as  one  of  the  most 
valuable  periods  of  my  early  life.  It  taught  me  to  be  indus- 
trious, active,  methodical,  and  the  value,  if  I  may  use  the  word, 
of  small  things.  I  was  brought  into  contact  with  all  varieties 
of  people,  had  to  turn  my  hand  to  every  kind  of  work,  and 
learned  how  to  be  respectful  and  obliging  to  all.  The  stock 
in  the  store  consisted  chiefly  of  light  cotton  goods,  twists, 
buttons  and  the  smaller  articles  of  hard  and  tin  ware,  and 


9 

other  articles  suite;l  to  the  primitive  condition  of  the  people 
with  whom  we  dealt.     The  greater  part  of  the  trade  consisted 
of  barter.     The  most  valuable  articles  received  in  exchange 
for  goods  were  peltries  of  one  kind  or  another.     The  route 
to  the  Eastern  markets  was  up  the  Ohio  River  to  Pittsburg 
and  Wheeling,  in  keel-boats;  thence  by  wagons  to  Philadel- 
phia or  Baltimore.     There  were  in  those  days  neither  roads 
nor  steamboats  in  the  West.     The  cost  was  too  great  to 
allow   the   transportation  of  the  produce  of  the  Western 
country  to  market,  except  a  small  amount  of  flour,  corn  and 
provisions  sent  down  the  river  in  arks,  or  ilatboats,  to  New 
Orleans.     Nearly  everything  was  produced  in  the  family  that 
was  consumed  in  it.     The  only  money  then  in  circulation 
was  silver— Spanish  coins  chiefly,  received  by  way  of  New 
Orleans.     This  was  packed  on  horses  when  the  merchant 
went  East  to  make  his  purchases,  and  the  lighter  kinds  of 
goods  brought  back  in  the  same  manner.     The  trip  to  and 
from  the  Eastern  States  was  then  an  affair  of  greater  magnitude 
and  peril,  and  required  a  greater  length  of  time  than  that  at 
present  between  New  York  and  San  Francisco,  or  between 
New  York  and  Europe.     The  country  was  wholly  without 
good  roads,  and  almost  the  only  mode  of  travel,  as  well  as  of 
transporting  merchandise,  was  upon  the  backs  of  horses  and 
mules.* 


*  Only  six  years  before  my  grandfather  moved  to  Tennessee,  General  Washington  crossed 
the  Allegheny  mountains  for  the  purpos:;  of  ascertaining  the  practicability  of  construct- 
in-  a  navigable  water  line  from  the  Potomac  to  the  Ohio.  The  report  of  his  journey  and 
observations  describes  so  accurately  the  coudition  of  the  Western  country  at  the  time 
and  the  necessity  of  improved  highways  to  unite  it  firmly  with  the  Eastern  States  tint  I 
cannot  refrain  from  copying  a  portion  of  his  communication  addressed  to  the  Governor  of 
Virginia : 

"  I  need  not  remark  to  you,"  said  Washington  in  the  communication  referred  to  "  that 
the  flanks  and  rear  of  the  United  States  are  possessed  by  other  powers,  and  formidable 
ones  too,  and  how  necessary  it  is  to  apply  the  cement  of  interest  to  bind  all  parts  of  the 
Union  together  by  indissoluble  bonds-espeeially  that  part  of  it  which  lies  immediately 
west  of  us-with  the  Middle  States.  For  what  ties,  let  me  ask,  should  we  have  upon  those 
people  (in  the  Mississippi  Valley  )l  How  entirely  unconnected  with  them  shall  we  be  and 
what  troubles  may  we  not  apprehend,  if  the  Spaniards  on  their  right  and  Great  Britain  o^ 


10 

In  1815  I  attended,  for  about  a  year  and  a  half,  an  acad- 
emy taught  by  Messrs.  Morse  and  Jones,  at  Newport,  Ken- 
tucky. They  were  excellent  teachers,  and  I  derived  great 
benefit  from  their  instruction.  In  1817  my  father  moved 
to  Madison.  Indiana.  This  State  Avas  admitted  into  the 
Union  the  year  previous,  and  contained  about  60,000 
inhabitants  scattered  very  sparsely  over  the  southern 
portion  of  it.  At  that  time  the  Indian  titles  were  ex- 
tinoTiished  only  twenty  miles  north  of  Madison.  At  this 
placs  my  father  opened  a  dry-goods  store.  The  town 
at  that  time  contained  about  one  hundred  and  fifty  peo- 
ple. It  had  been  so  recently  settled  that  it  was  still  a  for- 
est— the  trees  that  were  not  standing  almost  covered  the 
ground  where  they  fell.  It  was  wholly  without  streets,  or 
any  improvements  fitted  to  make  it  an  attractive  or  agreeable 
place.  After  our  removal  to  Madison  I  had.  for  a  year  and 
a  half,  the  almost  inestimable  advantage  of  a  private  school 
taught  by  a  very  superior  person  from  the  Eastern  States. 


their  left,  instead  of  throwing  stumbling-blocks  in  their  way,  as  they  now  do,  should  hold 
out  lures  tor  their  trade  and  alliance?  What,  when  they  gain  strength,  which  will  he 
sooner  than  most  people  conceive  (from  the  immigration  of  foreigners  who  will  have  no 
predilection  for  us,  as  well  as  the  removal  of  our  own  citizens),  will  he  the  consequence  of 
having  formed  close  connections  with  both  or  either  of  these  powers,  in  a  commercial 
w  ay  ?    It  needs  not,  in  my  opinion,  the  gift  of  prophecy  to  foretell. 

"The  Western  States  (I  speak  now  from  my  own  observation)  hang  upon  a  pivot.  The 
touch  of  a  feather  would  turn  them  any  way.  They  have  looked  down  the  Mississippi  till 
the  Spaniards,  very  impoliticly,  I  think,  for  themselves,  threw  difficulties  in  the  way;  and 
they  looked  that  way  for  no  other  reason  than  because  they  could  glide  gently  down  the 
stream,  without  considering,  perhaps,  the  difficulties  of  the  voyage  back  again  and  the 
time  neceEsary  to  perform  it;  and  because  they  had  no  other  means  of  coming  to  us  but 
by  land  transportation  and  unimproved  roads.  These  causes  have  hitherto  cheeked  the 
industry  of  the  present  settlers;  for  except  the  demand  for  provisions,  occasioned  by  the 
increase  of  population,  and  the  little  flour  which  the  necessities  of  the  Spaniards  compel 
them  to  buy,  they  have  no  incitements  to  labor.  But  smooth  the  road,  and  make  easy 
the  way  for  them,  and  then  see  what  an  influx  of  articles  will  be  poured  upon  us.  how 
amazingly  our  exports  will  increase,  and  how  amply  we  shall  ba  compensated  for  any 
trouble  and  expense  we  may  encounter  to  effect  it." 

It  has  been  reserved  to  the  present  generation,  by  the  construction  of  railways,  to 
"  smooth  the  road  and  make  easy  the  way"  for  the  West.  The  results  have  vastly  more 
than  fulfilled  the  anticipations  of  the  Father  of  his  Country.  These  works  have  not  only 
rendered  the  country  indissoluble,  but  have  created  a  commerce  the  magnitude  of  which 
really  exceeds  belief. 


11 


When  not  at  soliool  1  assisted  my  father  in  Lis  store.  At  this 
period  Genera]  Harrison,  afterward  President  of  the  United 

States,  and  who  was  a  warm  and  life-long  friend  of  our  fam- 
ily, procured  for  me  a  cadetship  at  West  Point.  I  was  very 
>  ager  to  accept  the  appointment,  but  relinquished  it,  seeing 

that  my  mother  was  greatly  distressed  at  the  thought  of  m\ 
leaving  home,  I  being  her  only  child. 

In  March,  1820,  my  father,  who  had  long  been  ill  from 
diseases  contracted  while  in  military  service  under  General 
Harrison,  died.  My  father,  from  his  infirm  health,  was  not 
successful  in  his  business  in  Madison,  and  died  insolvent  I 
settled  up  the  estate,  and  ultimately,  as  I  acquired  property 
of  my  own,  paid  all  his  debts  in  full. 

In  1819  I  commenced  the  study  of  law  in  the  office  of 
Gen.  Alexander  A.  Meek',  of  Madison.  I  finished  my  Legal 
course  by  graduating  at  the  Transylvania  law  school  in 
Kentucky,  in  1823.  I  immediately  commenced  the  practice 
of  law  in  Madison,  which  at  that  time  had  a  population  of 
about  300.  I  was  diligent,  strove  to  be  respected,  and  made 
it  a.  point  to  be  punctual  in  every  duty  and  appointment. 
It  was  early  my  purpose  of  life  to  respect  scrupulously  the 
rights  of  others,  but  always  to  be  firm  in  the  assertion  of  my 
own.  It  was  the  rigid  adherence  to  this  plan  of  life,  if  it 
may  be  so  called,  that  I  owed  my  success.  My  diligence 
and  fidelity  in  every  engagement  gave  me  the  command  of 
whatever  money  I  wanted,  as  it  was  well  known  that  I  would 
never  allow  my  liabilities  to  exceed  my  means.  While  in 
the  practice  of  the  law  I  made  the  cause  of  tny  clients  my 
own.  Success  or  defeat,  consequently,  gave  me  more  pL 
sure,  or  pain,  than  it  did  them.  I  was  for  this  reason  very 
successful ;  but  I  found  the  labor  and  anxiety  of  my  profession 
too  much  lor  my  strength,  which  led  me  to  give  il  upas 
soon  as  other  satisfactory  openings   for  business  presented 


12 


themselves.  While  in  the  practice  of  the  law  I  traveled 
what  was  called  the  South-eastern  District  of  Indiana,  prac- 
ticing in  a  large  number  of  counties.  The  only  mode  of 
traveling  in  those  days  was  by  horseback.  On  most  of  the 
routes  traveled  we  were  guided  by  trails  or  biased  lines,  which 
were  often  preferable  to  what  were  called  roads  which,  from 
the  friable  nature  of  the  soil,  were  speedily  so  cut  up  as  to 
be  almost  impassable,  particularly  in  the  wet  seasons  of  the 
year.  The  rivers  were  crossed  in  I02;  canoes,  and  bv  swim- 
ming  our  horses,  when  they  could  not  be  forded. 

In  1821:  I  was  appointed  assistant  clerk  of  the  House  of 
Representatives  of  the  State,  at  the  last  sitting  of  the  Legis- 
lature at  Corydon.  The  next  meeting  was  at  Indianapolis, 
the  present  capital.  I  continued  assistant  clerk  until  1827, 
when  I  was  elected  chief  clerk.  My  compensation  was  $3.50 
per  day.  I  kept  the  journal  in  which  was  entered  all  the 
proceedings  of  the  House,  and  did  the  reading.  My  duties 
required  the  greatest  diligence  and  the  closest  attention.  I 
soon  became  master  of  the  rules  and  modes  of  conducting 
business,  and  was  in  this  way  enabled  to  be  of  service  to 
members,  many  of  whom,  although  men  of  sense  and  ability, 
often  found  themselves  in  positions  of  embarrassment  from 
want  of  familiarity  with  legislative  proceedings.  My  good 
offices  were  often  availed  of  in  the  drawing  up  of  motions 
and  bills,  and  in  guiding  the  conduct  of  members  on  the 
floor.  I  regard  my  office  of  clerk  of  the  House  as  one  of  the 
chief  causes  of  my  future  success.  It  enabled  me  to  form  an 
intimate  acquaintance  with  all  the  leading  men  of  the  State, 
many  of  whom,  in  after  life,  were  not  slow  to  reciprocate  the 
o-ood  offices  I  had  done  them. 

With  my  practice  and  my  salary  as  clerk  of  the  House,  I 
was  in  receipt  of  quite  an  income,  for  those  days,  in  the  West. 
My  habits  were  simple  and  economical,  at  the  same  time  I 


13 


studied  to  make  every  one  dependent  upon  me,  among 
whom  was  my  mother,  comfortable  and  happy.  My  surplus 
means  were,  as  fast  as  acquired,  invested  in  real  estate  which, 
as  in  all  new  States,  rose  rapidly  in  value. 

When  clerk  of  the  House,  the  trip  from  Madison  to  In- 
dianapolis required  three  days  of  fatiguing  travel  on  horse- 
back.    It  is  now  performed,  by  railroad,  in  about  four  hours. 

In  1833,  upon  the  chartering  of  the  State  Bank  of  Indi- 
ana, I  retired  from  the  practice  of  the  law,  and  took  a  prom- 
inent share  in  the  management  of  that  institution.  I  held  a 
larger  amount  of  the  stock  first  subscribed  than  any  other 
individual.  This  bank  consisted  of  a  Central  Bank,  located 
at  Indianapolis,  with  ten  branches  in  as  many  leading  towns 
of  the  State.  I  was  the  first  President  of  the  Madison  branch. 
The  Central  Bank  was  not  one  of  discount  or  issue.  Its 
functions  were  a  general  supervision  of  the  branches,  being 
a  Board  of  Control,  of  which  Mr.  McCulloch,  afterward  Sec- 
retary of  the  Treasury  of  the  United  States,  and  myself,  were 
among  the  leading  members.  Notwithstanding  the  man- 
agers of  the  bank,  at  the  time  it  went  into  operation,  were 
wholly  without  training  or  experience  in  such  matters,  many 
of  them  never  having  been  inside  of  such  an  institution, 
it  proved  a  model  of  success,  and  consequently  most 
beneficial  to  all  the  interests  of  the  State.  The  capital  was 
almost  wholly  borrowed  from  abroad,  and  through  the  credit 
of  the  State,  which  took  $1,000,000  of  the  stock,  and  loaned 
its  credit  to  individual  stockholders  to  the  extent  of  one-half 
the  stock  subscribed  by  them,  taking  as  security  therefor, 
real  estate  at  one-half  of  its  unimproved  value.  The  credit 
of  the  State  was  high,  its  five  per  cent,  bonds  selling  at  a 
premium  averaging  from  twelve  to  fifteen  per  cent.  It  may 
seem  incredible  that  a  bank,  based  almost  wholly  upon  cajDi- 
tal  borrowed,   and  that,  too,  through  the  instrumentality  of 


14 


the  State,  should  have  proved  such  a  success.  It  would  ap- 
pear to  have  been  almost  inevitable  that  in  a  country  lack- 
ing in  commercial  training,  where  the  demand  for  capital  is 
always  excessive,  where  the  managers  of  trust  funds  have 
every  inducement  to  make  a  reckless  use  of  them,  and  where, 
among  the  great  mass,  there  is  very  little  idea  of  the  import- 
ance  and  value  of  promptness  in  the  payment  of  obligations, 
that  the  bank,  if  it  did  not  lose  its  capital,  would  soon  find  it 
converted  into  various  kinds  of  property  taken  in  payment 
of  loans,  or  in  the  overdue  notes  of  its  borrowers.  The  bank 
commenced  business  at  one  of  the  most  critical  periods  of 
the  history  of  the  country — at  the  very  beginning  of  that 
great  era  of  speculation  which  nearly  bankrupted  the  whole 
nation,  and  which  culminated  in  the  terrible  catastrophe  of 
1837.  At  this  disastrous  crisis  nearly  ever}"  bank  in  the 
"Western  and  South-western  States  failed,  with  the  exception 
of  that  of  Indiana.  A  very  large  number  of  those  of  the 
Eastern  States  were  totally  ruined.  It  would  seem  to  have 
been  almost  impossible  that  the  Bank  of  Indiana,  then  one 
of  the  newest  of  the  Western  States,  should  not  have  be- 
come involved  in  the  general  catastrophe.  So  far  from  this 
being  the  case,  the  bank  not  only  paid  dividends  averaging 
from  twelve  to  fourteen  per  cent,  annually,  but  returned  to 
its  stockholders  nearly  double  the  original  investment  when 
it  was  wound  up  at  the  expiration  of  its  charter  in  1854. 
For  the  $1,000,000  invested  by  it  in  this  institution,  the  State 
received,  in  profits  alone,  fully  $3,500,000.  These  profits 
now  constitute  the  school  fund  of  the  State,  the  increase  of 
which,  being  invested  in  the  State  indebtedness,  is  rapidly 
converting  the  whole  of  it  into  an  irredeemable  fund  to  be 
devoted  to  educational  purposes.  The  bank  was  the  only 
one  of  the  numerous  enterprises  in  which  the  State  embarked 
that  did  not  prove  an  almost  total  failure. 


l.-> 


As  we  had  always  intended  to  keep  our  banks  in  position  to 
meet  any  emergency  thai  might  arise,  we  had  not  in  the  least 
anticipated  the  general  suspension,  in  1887,  in  the  Eastern 
States  till  that  event  happened.  Our  Board  of  Control  were 
then  in  session  at  Indianapolis.  We  were  at  the  time  the 
depository  of  Si, 500, 000  of  Government  funds.  1  was  in- 
structed l>v  the  Board  to  proceed  immediately  to  Washing- 
ton  to  represent  our  condition,  and  to  confer  with  the  Sec- 
retary of  the  Treasury  as  to  what  we,  in  the  emergency, 
should  do.  I  took  with  me  $80,000  in  gold.  I  went  up  the 
Ohio  River  in  a  steamboat  to  Wheeling,  and  thence  by 
stage,  chartered  for  the  purpose,  alone  across  the  mountains 
to  Frederick,  at  that  time  the  Western  terminus  of  the  Bal- 
timore and  Ohio  Railroad,  and  61  miles  west  from  Baltimore. 
I  suffered  not  a  little  anxiety  on  account  of  the  treasure  I 
carried  more  than  800  miles,  through  a  wild  and  compara- 
tively uninhabited  region,  and  was  not  a  little  relieved  on 
reaching  the  sate  conduct  of  a  railroad.  On  arriving  at 
Washington  I  obtained  an  interview  with  the  Secretary  of 
the  Treasury,  the  Hon.  Levi  Woodbury,  explained  to  him 
the  position  and  the  entire  solvency  of  our  hank,  and  deliv- 
ered to  him  the  gold  I  had  brought  with  me,  in  part  pay 
ment  of  our  balances.  He  received  me  with  great  cordiality, 
and  said  that  our  hank  was  the  only  one  that  had  offered  to 
pay  any  portion  of  its  indebtedness  in  specie.  We  were  al- 
lowed to  retain  the  Government  deposits  till  they  were  drawn 
in  its  regular  disbursements.  At  his  solicitation  1  consented 
to  act  as  Pension  Agent  for  a  portion  of  the  Western  States. 
For  the  pei  sions  I  paid,  drafts  were  made  upon  the  Govern- 
ment deposits  in  our  bank.  Drafts  were  also  made  upon  us 
in  payment  of  troops,  transportation  of  the  mails,  and  other 
services.  In  all  these  payments  our  bank-notes,  from  our 
well-known  credit,  were  received  equally  with  specie.     In 


16 


such  payments  all  the  balances  against  us  were  liquidated  in 
a  manner  entirely  satisfactory  to  the  Government,  and  greatly 
to  our  convenience  and  advantage. 

In  April,  1838,  a  convention  of  the  officers  of  the  banks 
of  the  United  States  was  held  in  New  York,  for  the  purpose 
of  considering  the  subject  of  resuming  specie  j)ayments.  I 
attended  the  convention  as  the  representative  of  our  bank. 
In  the  debates  that  took  place  I  earnest^  favored  the  propo- 
sition for  immediate  resumption.  The  position  I  took  greatly 
pleased  the  venerable  Albert  Gallatin  who,  aged  as  he  was, 
was  the  leading  spirit  of  the  convention,  and  who  was  much 
gratified  in  finding  himself  earnestly  supported  from  a  quar- 
ter from  which  he  had  not  expected  aid.  He  took  occasion 
to  thank  me  personally  and  warmly  for  the  grounds  I  took. 
I  recollect  my  interviews  with  him  on  this  occasion  with 
great  pleasure. 

At  the  period  of  which  I  have  b3en  last  speaking,  nearly 
all  the  Western  States,  Indiana  among  them,  embarked  in 
elaborate  systems  of  internal  improvements.  These  were 
entered  upon  without  proper  reference  to  the  wants  or  con- 
ditions of  the  country,  and  embraced  extensive  water  lines, 
which  were  either  impracticable  or  of  little  valui  when  com- 
pleted. The  different  States  assumed  to  provide,  by  an  issue 
of  their  bonds,  the  means  for  their  construction.  These 
proving  wholly  inadequate,  failure  on  a  gigantic  scale  was 
inevitable.  For  such  works  the  State  of  Indiana  incurred 
a  debt  of  about  $10,000,000,  without  realizing  any  substan- 
tial benefit  therefor.  It  was  still  without  the  works  neces- 
sary to  give  value  to  its  products,  by  opening  to  them  the 
markets  of  the  East.  Wheat  raised  in  the  interior  of  the 
State,  at  the  period  referred  to,  would  not  bring  more  than 
25  cents  the  bushel.  Indian  Com  would  not  bring  more 
than  one-half  this  amount.     The  chief  value  of  the  latter 


11 

was  to  feed  it  to  live  stock.  There  could  be  no  substantial 
recovery  till  the  works  were  constructed,  which  have  since 
quadrupled  the  value  of  these  as  well  as  of  all  other  pro- 
ducts of  the  States.  But  years  had  to  elapse  before  their 
construction  could  be  undertaken  with  any  hope  of  success. 
The  people  were  too  poor  to  construct  them.  The  credit  of 
the  States  was  destroyed:  and  if  it  had  not  been,  consti 
tutional  provisions  were  enacted  by  most  of  them  forbidding 
them  to  create  a  debt  for  any  work  of  internal  improvement. 
A  paralysis  for  a  long  time  seemed  to  rest  upon  the  whole 
country.  After  the  resumption  of  specie  payments  in  1838-9, 
most  of  the  banks  of  the  country  again  suspended  in  1841. 
In  fact,  no  decided  recovery  took  place  till  the  acquisition 
of,  and  discovery  of  gold  in,  California,  in  1848,  from  which 
event  may  be  said  to  date  the  physical  development  of  the 
country,  which  is  now  the  marvel  of  the  world. 

One  of  the  most  important  branches  of  our  banking  busi- 
ness was  the  purchase  and  sale  of  exchange  made  by  the  in- 
ternal commerce  of  the  country.  At  that  time  the  only  out- 
lets of  the  interior,  as  far  west  as  Indiana,  were  the  Ohio  and 
the  Mississippi  Rivers.  New  Orleans  was  the  sole  port  of 
export.  We  purchased  largely  bills  drawn  against  ship- 
ments of  produce  to  this  port.  As  these  bills  were  about  to 
mature  it  was  my  custom  to  go  to  New  Orleans  to  invest 
their  proceeds,  and  such  other  means  as  our  bank  could 
spare,  in  the  purchase  of  bills  drawn  in  New  Orleans  upon 
shipments  of  produce  from  thence  to  the  Eastern  States. 
The  proceeds  of  the  latter  bills,  at  their  maturity,  supplied 
us  amply  with  exchange  for  our  Western  merchants,  in  pay- 
ment of  their  purchases  of  merchandise.  In  this  way  we 
were  enabled  to  turn  our  capital  several  times  each  year,  and 
at  a  good  profit,  without  the  loss,  I  believe,  of  a  single  dollar 
in  any  transaction. 
3 


18 


I  continued  in  the  management  of  the  Madison  Branch 
Bank  and  a  member  of  the  Board  of  Control  till  1849,  when 
the  subject  of  railroad  construction  again  began  to  excite 
general  attention  and  interest.  During  the  twelve  years  that 
had  elapsed  since  the  great  calamity  of  1837,  the  West  had 
increased  rapidly  in  population  and  wealth,  and  the  neces- 
sity for  improved  highways  was  felt  to  be  more  imperative 
than  ever.  The  acquisition  of  California,  and  the  discovery 
of  immense  deposits  of  gold  within  it,  gave  to  the  whole  na- 
tion an  impulse  never  before  felt.  Numerous  railway  en- 
terp rises  were  again  proposed  in  the  West,  and  I  felt  that 
the  time  had  at  last  come  when  they  could  be  safely  under- 
taken as  remunerative  investments  for  capital.  Residing  at 
Madison,  Indiana,  I  had  been  instrumental  in  the  resuscitation 
of  the  Madison  and  Indianapolis  Railroad,  originally  a  part 
of  the  system  of  public  work  which  the  State  had  attempted 
to  construct,  and  had  learned  from  the  early  success  of  that 
road  what  might  be  expected  of  other  lines  more  favorably 
situated.  For  the  purpose,  therefore,  of  embarking  in  the 
construction  of  railroads  on  a  wider  scale,  I  went  to  New 
York  in  the  latter  part  of  1818,  and  on  the  first  day  of  Jan- 
uary, 1819,  I  formed  a  copartnership  with  Mr.  Richard  H. 
Winslow,  the  chief  object  of  which  was  the  negotiation  of 
railway  securities,  although  we  contemplated,  in  connection 
therewith,  a  general  banking  business.  At  that  time  there 
were  in  operation  in  the  West  only  about  600  miles  of  line.* 


*  On  tin'  first  day  of  January,  184!>,  the  following  linos  of  rnilroad  were  in  operation  in 

the  States  north  and  west  of  the  Ohio  River: 

Length  of  Line. 

Ohio. — Little  Miami 84  miles. 

Mansfield  and  Sandusky 56     " 

Mad  River 102      " 

Indiana.— Madison  and  Indianapolis 86      " 

Michigan. — Michigan  Central 146 

Michigan  Southern TO      " 

Erie  and  Kalamazoo 33      " 

Detroit  and  Pontiac 25      " 

Illinois. — Sangamon  and  Morgan 53      " 

Total 655  milea. 


19 


These  roads  were  chiefly  the  remains  of  the  old  State  systems 
which  had  been  sold  out  to  private  companies,  and  were 
almost    without    exception   badly  located   and    imperfectly 
built.     They  were  in  all  cases  laid  with  the  light  flat  bar, 
upon  longitudinal   sills,  and   were   utterly  incapable  of  sus- 
taining heavy  trains,  high  speed,  or  a  large  traffic.      They 
had,  consequently,  involved  in  heavy  loss  all  who  had  been 
engaged  in  their  construction.      I   felt,  however,  their  want 
of  success   to  be   no  argument  against  lines  properly  con- 
structed  upon  good  routes.      I   undertook  to  demonstrate 
this  in  every  way  in  my  power,  particularly  in  newspaper 
articles  and  pamphlets,  of  which  I  published  great  numbers 
in  connection  with  the  negotiation  of  the  securities  of  vari- 
ous companies  which   we  undertook.      The   result  of  our 
efforts  soon  far  exceeded  our  expectations.     Although  we 
began  in  a  very  small  way,  every  step  we  took  gave  us  in- 
creased business  and  strength,  and  we  soon  had  all  the  busi- 
ness we  could  attend  to.      Commencing  with   the  bonds  of 
the  Madison  and  IndianaDolis  Railroad,  which  were  the  first 
securities  of  the   kind  ever  brought  out  in  the  New  York 
market,   we   followed   them   with   the  bonds  of  the   Little 
Miami ;    Columbus  and  Xenia  ;    Cleveland,  Columbus   and 
Cincinnati ;  'Cleveland,  Painesville  and  Ashtabula  ;  Ohio  and 
Pennsylvania  (now  a  part  of  the  Pittsburg,  Fort  Wayne  and 
Chicago) ;    Michigan  Southern,  and  other  important  lines. 
We  not  unfrequently  negotiated  a  million  of  bonds  daily. 
The  aggregate  for  the  year  was  enormous.     We  were  without 
competitors  for  a  business  we  had  created,  and  consequently 
made  money  very  rapidly.     The  commissions  for  the  nego- 
tiation of  bonds  averaged  at  first  five  per  cent.     With  their 
negotiation  we  often  coupled  contracts  for  the  purchase,  at  a 
large  commission,  of  rails.      Our  business  soon  became  so 
great  that  it  was  a  question  with   us.  not  so  much  what  we 


20 

would  undertake,  as  what  we  would  reject.  We  not  unfre- 
quently  took,  on  our  own  account,  an  entire  issue  of  bonds 
of  important  lines. 

The  negotiation  of  the  securities  of  companies  was  fol- 
lowed by  arrangements  that  made  our  house  the  agent  for 
the  payment  of  interest  accruing  on  them,  as  well  as  transfer 
agents.  Such  arrangements  naturally  led  the  way  to  the 
banking  business  to  which  we  afterward  chiefly  confined 
ourselves.  The  extent  of  our  business  as  well  as  of  our  suc- 
cess exceeded  all  expectation.  During  the  period  of  six 
years,  from  1849  to  1854  inclusive,  in  which  we  were  actu- 
ally engaged  in  the  negotiation  of  railway  securities,  10,724 
miles  of  line  were  constructed,  nearly  one-half  of  which  were 
in  the  Western  States.  With  all  the  more  important  lines 
we  were,  in  one  way  or  another,  connected.  At  one  period 
we  paid  the  interest  on  fifty  different  classes  of  securities. 
These  facts  will  convey  some  idea  of  the  magnitude  of  our 
business  and  the  vigor  and  energy  with  which  it  was  con- 
ducted. 

The  uniform  success  of  the  enterprises  in  behalf  of  which 
we  acted  was  something  remarkable,  and  has  .since  been  a 
source  of  great  satisfaction.  I  feel  that  investors,  as  well  as 
the  country  at  large,  have  been  greatly  benefited  by  my 
labors.  The  interest  on  almost  all  the  securities  brought  out 
by  us  has  been  regularly  paid,  while  in  not  a  few  instances 
there  has  been  an  enormous  profit  upon  the  prices  paid.  Our 
house  was  the  first  to  bring  out  county  and  city  securities, 
issued  for  the  construction  of  railroads.  These  securities 
were  instrumental  in  the  construction  of  an  immense  extent 
of  line,  which,  but  for  them,  could  not  have  been  built,  while 
they  have  proved  a  most  excellent  investment.  In  no  in- 
stance, I  believe,  have  the  counties  and  cities,  the  bonds  of 


21 


which  we  negotiated,  made  default,  either  in  principal  or  in- 
terest. 

Rapid  as  has  been  the  progress  of  railroads  since  we  first 
eno-asred  in  their  construction,  that  of  their  commerce  is  a 
matter  of  still  greater  surprise  and  wonder.  Considered  in 
reference  to  its  magnitude,  they  have  created  the  present 
immense  wealth  of  the  nation.  Previous  to  their  construc- 
tion, the  products  of  the  interior,  only  a  short  distance  re- 
moved from  navigable  water-courses,  had  no  commercial 
value.  The  greatest  abundance  of  the  peculiar  products  of 
a  section  mio-ht  srive  only  an  inconsiderable  amount  of  com- 
fort,  and  no  wealth.  "With  such  works,  the  whole  natural 
wealth  of  the  country  became  at  once  available  to  the  uses 
of  man.  When  we  consider  that  the  commerce  of  the  coun- 
try, borne  upon  railroads,  dates  from  a  period  considerably 
subsequent  to  the  time  I  left  the  West  for  New  York  to  em- 
bark in  these  enterprises,  and  that  this  commerce  to-day 
measures,  in  bulk,  100,000,000  tons,  having  a  value  of 
$10,000,000,000,  and  that  the  earnings  of  our  railroads  equal- 
ed $100,000,000  in  1868,  against  $10,000,000  in  1851,  and 
that  the  investment  in  them,  now  amounting  to  $L,800,000,- 
000,  has  increased  in  like  ratio,  the  vastness  and  rapidity  of 
this  development  will  be  in  some  degree  appreciated.  I  have 
not  only  been  contemporaneous  with  all  this  growth,  and,  to 
some  extent,  instrumental  in  promoting  it,  but  I  reach  far 
beyond  its  first  inception.  In  one  respect,  therefore,  my  life, 
as  does,  in  fact,  that  of  every  middle-aged  man,  covers  a  wider 
experience  than  that  of  all  the  generations  of  men  from  ear- 
liest history  to  the  present  time. 

In  the  West,  twenty  years  ago,  precisely  the  same  means 
were  used  for  the  transportation  of  persons  and  property 
that  were  used  in  the  very  infancy  of  the  race.  So,  too, 
nearly  all  the  other  methods  of  domestic  economy  were  en- 


22 


tirely  similar  for  the  two  widely-separated  periods.  When  a 
child,  and  till  I  reached  manhood,  the  clothing  I  wore  was 
made  up  at  home,  and  by  the  members  of  the  family.  The 
present  generation  consequently  have,  in  all  that  relates  to 
the  economy  of  life,  what  might  be  termed  an  universal  ex- 
perience. The  coming  one  will  have  only  that  which  be- 
longs to  itself.* 

At  the  close  of  1854  we  withdrew  from  the  negotiation  of 
railway  securities,  and  confined  ourselves  chiefly  to  Bank- 
ing, for  which  our  previous  success  had  opened  a  wide  field. 
We  however  continued  to  be  the  financial  and  transfer 
agents  of  a  large  number  of  railway  companies  whose  secu- 
rities we  had  negotiated. 

In  1857  the  health  of  Mr.  Winslow  began  to  fail.  In 
consequence  of  this  he  retired  from  our  firm  in  1859.  He 
died  on  the  14th  of  February,  1861.     He  was  a  man  of  rare 


*  As  already  stated,  tlie  number  of  miles  of  railway  in  operation  in  the  Western  States- 
in  1349,  the  year  I  removed  to  New  York,  was  655.  On  the  first  day  of  January,  1869,  twen- 
ty years  thereafter,  there  were  16,839  miles  in  operation.  The  number  in  each  State,  at 
the  dates  named,  is  shown  in  the  following  table  : 

Ohio 242  3,398 

Michigan 274  1,199 

Indiana 86  2,600 

Illinois 53  3,440 

Wisconsin —  1,235 

Minnesota —  572 

Iowa —  1,523 

Kansas —  648 

Nebraska —  920 

Missouri —  1,354 

Total  miles 655  16,889 

The  increased  railroad  mileage  in  these  States,  in  twenty  years,  was  16,234  miles,  or  an 
average  of  812  miles  annually.  The  capital  invested  in  them  on  the  first  day  of  January, 
1869,  at  the  rate  of  $40,000  per  mile,  equaled  $675,556,000— the  increase  in  the  twenty 
years  being  fully  $665,000,000.  The  aggregate  tonnage  of  the  roads,  for  1869,  equaled  l,C0O 
tons  to  the  mil  j,  or  an  aggregate  of  25,333,000  tons,  of  which  the  increase  exceeded 25, 000,000 
tons.  The  value  of  this  tonnage,  at  $150  per  ton,  equaled  $3,750,000,000,  nearly  the  whole 
of  which  was  a  creation  of  the  period  named.  These  illustrations  will  show  how  rapid  has 
been  the  growth  of  the  West  for  the  past  twenty  years.  When  I  compare  its  present  con- 
dition with  what  it  was  forty  years  ago,  I  am  at  a  loss  for  language  to  express  adequately 
the  change. 


23 


force  and  energy  of  character,  and  by  thoroughly  compre- 
hending the  value  of  railways,  admirably  adapted  to   the 
business  in  which  we  embarked     He  had,  above  all  men 
I  ever  knew,  the  faculty  of  inspiring  others  with  the  zeal 
and  confidence  which  he  himself  felt.     Whatever  he  under  - 
took  was  certain  to  be  accomplished.     When  we  consider 
the  results  that  railroads  secure — that  every  mile  of  line  built 
adds,  immediately,  four-fold  its  cost  to  the  aggregate  value  of 
the  property  of  the  country,  and  that  the  traffic  which  it 
creates  and  which  passes  over  it  exceeds  annually  six  times 
such  cost,  we  can  form  some  idea  of  the  services  rendered  to 
society  by  a  man  whose  energy  and  influence  was  instru- 
mental in  the  construction  of  an  immense  extent  of  line. 
He  was  one  of  the  leading  spirits  that  inaugurated  and  sus- 
tained the  great  movement  that  led  to  the  construction  of 
the  vast  system  of  works  that  are  now  spread,  like  a  net- 
work, over  the  whole  country,  and  which  now  embraces 
nearly  50,000  miles  of  line.     He  never  ceased  from  his  labors 
till  compelled  to  do  so  by  his  declining  health.     All  my  re- 
lations with  him  were  of  a  most  harmonious  character,  and 
it  gives  me  great  pleasure  to  pay  this  tribute  to  his  memory. 
Although  our  firm  did  not,  after  1854,  negotiate  railway 
securities  to  any  considerable  extent,  we  continued  to  cher- 
ish a  lively  interest  in  those  enterprises  in  behalf  of  which 
we  had  acted,  and  frequently  rendered  them  pecuniary  as- 
sistance in  emergencies  in  which  they  not  unfrequently  found 
themselves  placed.     The  great  movement  which  commenced 
in  1848  culminated  in  1857,  in  a  suspension  of  specie  pay- 
ments by  the  banks,  and  in  an  excessive  prostration  of  busi- 
ness throughout  the  country.      No  interest  suffered  so  se- 
verely as  the  railroads.     Nearly  all  of  them  had  been  con- 
structed upon  borrowed  capital,  and  most  of  the  companies 
owed  large  floating  debts.      All  wanted  large   additional 


24 


means,  either  to  complete  their  works  or  to  discharge  press- 
ing liabilities.      Even  so  late  as  1858  the  earnings  of  roads 
were  not  one  quarter  their  present  amount.     These  earnings, 
owing  to  the  embarrassments  into  which  every  kind  of  in- 
dustry and  business  had  fallen,  decreased  largely  for  several 
years,  and  in  many  cases  proved  wholly  inadequate  to  meet 
even  the  calls  for  interest.     Many  of  our  most  valuable  en- 
terprises were  forced  into  bankruptcy,  and  had  to  be  reor- 
ganized by  new  adjustments  of  interests,  and,  in  most  cases, 
by  large  sacrifices  on  the  part  of  the  stock  and  bondholders. 
A  period  of  great  general  depression  and  discouragement 
followed  one  of  previous  confidence  and  hope.     In  this  crisis 
it  devolved  naturally  upon  parties  who  had  been  instru- 
mental in  providing  the  means  for  the  construction  of  roads 
to  raise  them  from  their  depressed  condition,  and  place  them, 
if  possible,  in  a  position  in  which  they  could  be  successfully 
worked  and  realize  the  expectations  formed  of  them.    Among 
the  companies  that  yielded  to  the  financial  storm  was  the 
Pittsburg,  Fort  Wayne  and  Chicago — a  company  with  which 
I  had  been  early  identified,  whose  securities  we  had  nego- 
tiated, and  for  whose  good  name  and  success  I  was  most 
solicitous.       To  its  restoration  I  consequently  devoted  no 
small  portion  of  my  time,  till  all  its  embarrassments  were 
happily  suimountecl,  and  the  road  placed  in  a  position  of 
perfect  independence,  in  which  it  proved  itself  to  be  one  of 
the  most  valuable  enterprises  of  the  kind  in  the  United 
States.     Perhaps  I  cannot  better  show  the  difficulties  into 
which  this  work,  in  common  with  many  others,  had  fallen, 
and  of  its  subsequent  recovery,  than  by  copying  the  follow- 
ing article  in  reference  thereto,  from  the  New  York  Times 
newspaper,  under  date  of  July  21,  186$ '• 

"  In  1859  the  Pittsburg,  Fort  W  ayife  and  Chicago  Kailroad, 
in  ccmmon  with  most  oilier  lines,  was  overwhelmed  in  the 


25 

financial  revulsion  which  had  swept  with  resistless  force  over 
the  whole  country.  The  road  had  been  just  opened  to  Chi- 
cago. The  line  was  originally  undertaken  by  three  companies, 
none  of  which  possessed  means  at  all  adequate  to  the  construc- 
tion of  their  several  links.  The  road  when  opened  was  hardly 
more  than  half  completed.  Its  earnings,  not  equaling  one- 
quarter  their  present  amount,  were  wholly  insufficient  to  meet 
current  expenses  and  the  interest  on  its  funded  debt.  Default, 
by  necessary  consequence,  was  made  on  all  classes  of  its  se- 
curities. Bankruptcy  stared  the  concern  full  in  the  face, 
threatening  the  loss  of  nearly  the  whole  amount  invested. 

In  this  crisis  a  meeting  of  its  creditors,  chiefly  first  mort- 
gage bondholders,  was  called  at  the  office  of  Winslow,  Lanier 
&  Co.,  to  consider  what  was  to  be  done.     This  class  of  cred- 
itors, of  course,  had  the  precedence.     If  they  insisted  upon  the 
letter  of  the  law,  they  would  inevitably  cut  off  all  subsequent 
parties  in  interest,  who  represented  an  amount   of  capital  in- 
vested in  the  road  twice  greater.     After  much  deliberation  it 
was  decided  to   raise  a  committee  to  be  invested  with  full 
power,  and  if  possible,  save  the  interests  of  all.     This  commit- 
tee consisted   of  Mr.  J.  F.  D.  Lanier,  who  was  appointed  by 
the  creditors  its  chairman ;  Mr.  Samuel  J.  Tilden,  Mr.  Louis  H. 
Meyer,  Mr.  J.  Edgar  Thomson,  President  of  the  Pennsylvania 
Railroad,  and  Mr.  Samuel  Hanna  of  Fort  Wayne.      To  give 
some  idea  of  the  chaos  existing  in  the  affairs  of  the  Company, 
Ave  may  state  that  there  were  outstanding,  at  the  time,  nine 
different  classes  of  bonds,  secured,  in  one  way  or  another,  upon 
the  different  portions  of  the  road ;  two  classes  secured  by  real 
estate  belonging  to  the  Company,  and  several  issued  in  the 
funding  of  coupons.     Upon  all  these,  interest  for  several  years, 
amounting  to  many  millions  of  dollars,  was  overdue.    The  prin- 
cipal sums  of  several  of  the  first  mortgages  were  speedily  to  ma- 
ture.    The  Company  also  owed  more  than  $2,000,000  of  float- 
ing debt,  portions  of  it  in  the  form  of  judgments  recovered  in 
the  State  courts.     The  road  was  in  extremely  bad  condition 
4 


aa 


and  required  the  expenditure  of  a  large  sum  to  enable  it  to 
conduct  its  business  with  any  degree  of  economy  or  dispatch. 

Such  was  the  condition  of  affairs  when  the  Committee  com- 
menced work.  The  value  of  the  securities  of  the  Company 
was  merely  nominal.  Its  stock  would  not  sell  for  five  cents 
on  the  dollar.  Each  class  of  creditors  was  striving  to  gain 
some  advantage  at  the  expense  of  the  others.  The  first  step 
of  the  Committee,  consequently,  was  to  put  the  property  be- 
yond the  reach  of  individuals  and  in  the  custody  of  the  coui'ts. 
An  order  for  this  purpose  was  obtained  in  the  United  States 
District  Court  for  the  Northern  District  of  Ohio,  on  the  17th 
of  January,  1860,  and  Mr.  Wm.  B.  Ogden  was  appointed  re- 
ceiver. 

The  Committee  set  out  with  the  determination  of  preserv- 
ing, if  possible,  the  rights  of  all  the  parties  in  interest — not 
alone  those  of  the  first  mortgage  bondholders.  It  was  hoped 
that  when  the  property  was  put  beyond  the  reach  of  individual 
creditors,  an  arrangement  might  be  effected  and  the  rights  of 
the  various  parties  preserved  in  the  relations  they  had  previ- 
ously maintained.  But  such  an  adjustment  required  the  assent 
of  each  creditor  and  stockholder.  This,  in  the  multiplicity 
and  conflict  of  interests,  it  was  found  impossible  to  obtain. 
The  next,  and  only  remaining  course,  was  to  sell  the  road  and 
property  of  the  Company  by  an  order  of  Court  in  behalf  of  the 
first  mortgagees.  Such  sale  would  vest  absolutely  the  title  to 
the  road  in  the  hands  of  the  purchasers,  who  would  thus  be  in 
position  to  make  such  disposition  of  it  as  in  their  view  equity 
and  justice  might  demand.  It  would  also  enable  them  to 
apply  the  net  earnings  to  the  construction  of  a  good  road, 
without  which  the  investment  itself  would  be  of  no  value. 

With  this  purpose  a  full  plan  of  reorganization,  such  as  was 
finally  adopted,  was  prepared  and  published,  and  brought,  as 
far  as  possible,  to  the  attention  of  every  party  in  interest. 
Decrees  for  sale  had  to  be  obtained  in  the  Courts  of  the 
United  States  for  four  different  States.     The  time  required  for 


27 


this  purpose  was  occupied  by  the  Committee  in  incessant  ef- 
forts in  removing  one  impediment  after  another  thrown  in  their 
way  by  importunate  and  dissatisfied  creditors,  who  were  indif- 
ferent to  the  fate  of  the  concern,  provided  they  could  get  their 
pay.  All  difficulties  were  at  last  overcome,  and  on  the  24th  of 
October,  1861,  the  road  and  property  was  sold  at  auction,  and 
purchased  by  Mr.  Lanier,  in  behalf  of  himself  and  his  associ- 
ates, for  the  sum  of  $2,000,000.  The  Courts,  we  are  happy  to 
say,  facilitated  legal  proceedings  as  far  as  this  could  be 
properly  done.  They  had  full  confidence  in  the  Committee, 
and  sympathized  with  the  unfortunate  creditors  of  the  concern, 
and  not,  as  at  the  present  clay,  in  our  State,  with  bands  of  con- 
spirators against  the  public  welfare,  who  seek  the  control  of 
great  lines  with  no  other  purpose  but  to  plunder  them. 
Eight  years  ago,  measured  by  what  has  since  transpired,  was 
a  golden  age  of  judicial  purity. 

By  the  sale  of  the  road  a  most  important  step  was  gained. 
The  title  to  it  vested,  absolutely,  in  the  purchasers.  They 
could  convey  it  to  whom,  at  what  price  and  upon  what  terms 
they  pleased.  What  followed  was  more  a  matter  of  detail, 
though  involving  great  patience  and  labor.  For  the  creation 
of  a  new  Company,  according  to  the  original  plan  of  reorgani- 
zation, legislation  had  to  be  obtained  in  the  States  of  Pennsyl- 
vania, Ohio,  Indiana  and  Illinois.  Such  legislation  was  at  last 
secured,  a  new  Company  formed,  to  which  was  conveyed  the 
railroad  and  everything  appertaining  thereto,  the  Committee 
receiving  therefor,  first,  second  and  third  mortgage  bonds,  in 
amounts  sufficient  to  meet  the  sums  due  the  different  classes  of 
creditors  in  the  old  Company  ;  and  also  certificates  of  stock 
corresponding  in  amount  to  that  outstanding  in  the  old. 
First  mortgage  bonds,  to  the  amount  of  $5,200,000,  were 
issued  to  the  first  mortgage  bondholders  of  the  old  Company, 
and  of  the  several  links  of  which  its  road  was  composed,  and 
for  accrued  interest.  The  bondholders  were  also  required  to 
fund,  for  two  years,  the  interest  accruing  on  the  new  bonds, 


28 


so  as  to  allow,  for  such  a  period,  the  application  of  the  net 
earnings  to  construction.  The  second  mortgage  bondholders 
received,  in  the  same  manner,  and  subject  to  similar  condi- 
tions, second  mortgage  bonds  to  the  amount  of  $5,250,000. 
The  unsecured  creditors  were  paid  off  in  third  mortgage  bonds 
to  the  amount  of  $2,000,000.  The  shareholders  received  new 
certificates  in  exchange  for  the  old.  By  such  means  each 
class  of  creditors,  without  the  abatement  of  a  dollar,  were  fully 
and  completely  reinstated  in  the  new  Company  in  the  order 
they  stood  in  the  old.  The  proper  transfers  and  exchanges 
were  made,  and  on  the  1st  day  of  May,  1862,  two  years  and 
six  months  after  the  road  was  placed  in  the  hands  of  a  receiver, 
and  six  months  after  the  sale,  the  trust,  so  long  held  and  faith- 
fully executed,  was  brought  to  a  virtual  close,  to  the  entire 
satisfaction  of  every  party  in  interest  in  the  road. 

During  the  period  of  reorganization  the  road  was  operated, 
under  the  general  direction  of  the  Commiteee,  by  Geo.  W. 
Cass,  its  former  and  subsequent  President.  His  well-known 
abilities  as  a  railroad  manager  were  never  more  conspicuously 
displayed  than  in  this  service.  He  had  every  difficulty  to 
contend  with — an  impoverished  and  half  completed  road,  with 
clamorous  creditors  at  every  turn.  The  Chairman  of  the  Com- 
mittee was  not  unfrequently  called  upon  to  advance,  from  his 
private  funds,  considerable  sums  in  aid  of  the  operations  of 
the  road.  Such  advances  were,  of  course,  repaid,  but  only 
with  simple  interest.  The  good  name  and  financial  strength 
of  Mr.  Lanier,  joined  to  his  well-known  prudence  and  caution, 
tended  to  inspire  great  confidence  in  the  action  of  the  Com- 
mittee in  which  he  justly  exerted  great  influence.  Mr.  Thom- 
son's position  as  chief  of  a  great  and  successful  enterprise, 
enabled  him  to  render  very  great  aid  to  the  Committee  in  the 
operations  of  the  road.  Indeed,  it  was  through  his  instru- 
mentality that  the  old  Company  was  enabled  to  push  its  line 
through  to  Chicasro.  Mr.  Tilden  was  the  chief  lesjal  adviser 
of  the  Committee  and  Company  throughout.     Pie  had  charge 


29 


of  the  proceedings,  not  only  for  the  winding  up  of  the  old,  but 
for  the  formation  of  the  new  Company,  and  for  the  recent 
transfer  of  the  road  to  the  Pennsylvania  Company,  and  drew 
up  all  the  documents  and  guarantees  relating  to  the  same. 
The  proper  discharge  of  his  duties  involved  the  fate  and  se- 
curity of  the  whole  investment.  Not  a  suggestion  has  been 
ever  raised  that  they  were  not  ably  and  faithfully  performed. 
The  directors  of  the  Company,  pending  its  reorganization, 
rendered  valuable  assistance.  Many  of  them  resided  upon  the 
line  of  the  road,  and  were  enabled  to  exert  a  salutary  influ- 
ence, not  only  among  the  creditors  of  the  Company,  but  in 
securing  the  legislation  required.  But  it  is,  perhaps,  invidi- 
ous to  particularize  when  all  worked  faithfully  and  well.  Not 
a  dollar  was  ever  paid  to  secure  the  legislation  required  for 
the  formation  of  the  new  Company ;  not  a  dollar  to  buy  ofl" 
importunate  or  unreasonable  creditors.  The  Committee  never 
had  a  secret  which  they  turned  to  account  at  the  expense  of 
the  stock  and  bondholders.  Their  plans  were  prepared  and 
published  in  the  outset,  and  scrupulously  adhered  to. 

Soon  after  the  new  Company  commenced  operations  it  was 
seen  the  enterprise  had  passed  its  darkest  days.  For  the  year 
ending  December  31,  1862,  the  net  earnings  of  the  road 
equaled  nearly  $2,000,000,  all  of  which  were  applied  to  con- 
struction. The  Committee  was  enabled  to  add  largely  to  its 
available  means  by  the  sale  of  property  purchased  with  the 
road,  but  not  needed  in  its  future  operations,  and  which,  in 
fact,  they  were  not,  by  the  terms  of  the  trust,  to  account  for 
to  the  new  Company.  The  sums  realized  from  these  sources, 
and  paid  over  to  the  Company,  equaled  about  $600,000,  of 
which  some  $400,000  was  saved  by  a  compromise  which  the 
Committee  were  enabled  to  make  with  European  holders  of 
bonds  secured  by  real  estate.  All  the  advantages  gained  by 
such  settlements  were  given  to  the  new  Company. 

In  1863  the  net  earnings  equaled  nearly  $3,000,000.  These 
sums  enabled  the  Company  to  place  its  road  in  first-rate  condi- 


30 


tion ;  and  on  the  1st  day  of  April,  1864,  it  commenced  the 
payment  of  dividends  at  the  rate  of  10  per  cent,  per  annum, 
free  of  Government  tax,  in  quarterly  payments  of  2£  per  cent, 
each.  These  were  continued  regularly  to  the  1st  day  of  July, 
1869,  when  the  road  was  leased  to  the  Pennsylvania  Railroad 
Company  for  999  years,  at  an  annual  rental  of  12  per  cent,  on 
its  share  capital. 

In  this  lease  the  Pennsylvania  Company  assumes  every  ob- 
ligation or  charge  for  which  the  Fort  Wayne  Company  are,  or 
may  be,  liable.  It  pays  the  sum  of  $19,000  annually  for  the 
maintenance  of  the  organization  of  the  former.  It  keeps  up 
the  annual  contributions  to  the  sinking  fund.  These  contribu- 
tions will,  in  twenty-six  years,  wholly  pay  oif  the  bonded 
debt  of  the  Fort  Wayne  Company,  leaving  the  stockholders 
the  sole  owners  of  the  road ;  and,  in  conclusion,  it  agrees  to 
pay  an  annual  rental  of  11,380,000,  a  sum  which  equals  12  per 
cent,  annually  upon  the  stock,  free  of  Government  tax,  or  of  any 
other  charge.  The  terms  of  the  lease  also  allow  the  Fort 
Wayne  Company  to  increase  its  share  capital  seventy-one  and 
three-sevenths  per  cent.,  and  to  issue  certificates  for  the  whole 
capital,  upon  which,  for  the  entire  period  of  the  lease,  seven  per 
cent,  a  year,  in  quarterly  payments  of  one  and  three-quarters  per 
cent.,  free  of  Government  tax,  is  to  be  paid.  All  these  pay- 
ments, as  well  as  the  accruing  interest,  are  to  be  made  directly 
to  the  agency  of  the  Fort  Wayne  Company,  in  New  York. 
When  we  consider  that  the  net  earnings  of  the  road  largely 
exceed  the  rental  paid,  and  that  this  rental  is  guaranteed  by 
the  most  powerful  and  successful  railroad  corporation  on  this 
Continent,  and  that  the  lease  will  inure  even  more  to  its  ad- 
vantage than  to  that  of  the  lessors,  in  placing  a  common  line 
under  a  common  head  and  management,  certainly  it  is  not 
within  the  power  of  man  to  make  a  better  security,  or  one  in 
which  trust  funds  can  be  more  securely  placed. 

We  have  thus  put  on  record  a  detailed  statement  of  the  re- 
suscitation and  success  of  a  great  enterprise,  as  an  example  of 


SI 

what  has  been  and  may  be  accomplished  by  upright,  able  and 
public-spirited  men.  In  no  country  do  railways  bear  a  rela- 
tion to  the  internal  economy  of  a  people  so  intimate  as  in  ours. 
No  investments,  consequently,  can  be  so  productive  as  those 
made  in  good  and  well-managed  lines.  There  is  no  doubt  that 
the  gross  earnings  of  the  railroads  of  the  Northern  States  equal 
fully  30  per  cent,  annually  of  their  actual  cost.  One-third  of 
this,  at  least,  should  be  net,  and  we  take  pleasure  in  placing 
an  illustration  before  our  readers,  where  the  best  possible  net 
result  has  not  only  been  secured,  but  secured  as  it  should  be, 
to  those  who  are  and  have  been  the  owners  of  the  property." 

I  have  given  this  statement  as  an  example  of  what  patient 
labor  and  watchfulness  may  accomplish  under  similar  cir- 
cumstances. We  not  only  saved  a  vast  property,  at  one 
time,  to  all  appearances,  wholly  wrecked,  but  made  it  one  of 
the  most  productive  railroads  in  the  country,  and  finally 
leased  it  in  perpetuity  to  one  of  the  richest  and  most  pros- 
perous corporations  in  the  United  States — the  Pennsylvania 
Kailroad  Company — at  an  annual  rental  of  12  per  centum 
per  annum,  after  making  full  provision  for  the  principal  and 
interest  of  its  debts.  An  immense  investment  was  not  only 
saved,  but  rendered  productive  almost  beyond  precedent ; 
and  with  it,  great  numbers  of  persons  whose  means  were  in- 
vested in  the  road,  saved  from  poverty  and  want.  In  their 
comfort  and  happiness  I  am  well  repaid  for  the  toil  and 
anxiety  which  I  underwent  on  account  of  this  work. 

In  1860,  the  election  of  Mr.  Lincoln  to  the  Presidency  of 
the  United  States,  an  event  which  I  earnestly  desired,  was 
followed  by  mutterings  of  the  coming  storm,  which  soon 
burst  upon  the  country  with  resistless  violence.  I  was  too 
old  to  take  the  field,  but  I  gave  whatever  aid  and  encour- 
agement I  could  to  the  cause  of  the  Union.     It  was  not  long, 


82 


however,  before  I  was  called  upon  to  assume  more  respon- 
sible duties,  on  account  of  the  relations  which  I  had 
sustained  to  the  State  of  Indiana.  That  State  voted  for  Mr. 
Lincoln,  and  at  the  same  time  elected  State  officers  in  politi- 
cal sympathy  with  him.  The  Hon.  Henry  S.  Lane,  who 
had  been  elected  Governor  of  the  State,  was  chosen  by  the 
Legislature,  upon  its  assembling,  as  Senator  in  the  Congress 
of  the  United  States.  By  this  event,  the  Hon.  O.  P.  Morton, 
Lieutenant  Governor,  became  the  Chief  Magistrate.  The  war 
found  the  State  almost  wholly  without  means  for  arming, 
equiping  or  sending  into  the  field  the  quota  of  troops  re- 
quired of  it.  It  had  no  money  in  its  treasury,  and  in  the 
general  distrust  which  prevailed,  and  in  the  universal  scram- 
ble for  money,  for  all  the  loyal  States,  as  well  as  the  Fed- 
eral Government,  were  in  the  market  for  it,  it  was  found  im- 
possible to  sell  its  bonds,  or  to  provide  in  season,  from  its 
own  resources,  the  means  required.  In  this  dilemma  Gov- 
ernor Morton  applied  to  me  for  a  loan  of  money  to  arm 
and  equip  the  quota  of  troops  required  of  his  State.  I 
complied  with  his  request,  and  continued  such  advances 
as  they  were  required,  till  the  whole  amount  reached 
$400,000.  With  this  sum  he  was  enabled  to  arm  and 
equip  his  quota  in  a  most  satisfactory  manner,  and 
despatch  it  to  the  field  more  promptly  than  that  of 
any  other  Western  State.  Indiana  at  all  times  was  nearly 
equally  divided  upon  the  subject  of  the  war.  Whatever, 
consequently,  tended  to  inspire  the  confidence  and  raise  the 
spirits  of  the  Union  party  within  it,  greatly  strengthened  the 
hand  of  the  Executive,  and  had  a  most  important  and  fa- 
vorable influence  upon  the  great  contest. 

In  1862,  owing  to  the  reverses  that  had  befallen  the  Union 
arms,  the  elections  in  many  of  the  States  went  adversely  to 
the  National  cause.     In  Indiana  a  majority  of  the  members 


33 

returned  to  the  Legislature  for  that  year  were  bitterly  op- 
posed to  the  war,  and  to  all  measures  necessary  for  its  vig- 
orous prosecution.  They  were  determined,  if  possible,  to 
take  the  State  out  of  the  Union  ranks,  and  place  it  in  direct 
antagonism  to  the  Government  at  Washington.  The  success 
of  their  disloyal  schemes  might  have  proved  fatal  to  the 
great  cause.  None  understood  this  better  than  themselves. 
Indiana  was  not  only  one  of  the  leading  States  of  the  West, 
but  in  many  respects  it  occupied  a  position  of  first-rate  im- 
portance. It  was  centrally  situated,  and,  extending  from 
Lake  Michigan  to  the  Ohio,  it  would,  in  disloyal  hands, 
have  been  in  a  position  to  cut  off  all  communication  between 
the  West  and  the  East.  Its  southern  border  rested  upon 
territory  where  the  great  mass  of  the  people  were  strongly 
infected  with  the  spirit  of  rebellion.  This  State,  consequent- 
ly, became  emphatically  the  battle-ground  of  the  contest  in 
the  North.  If  its  influence  had  been  arrayed  against  the 
Union,  the  infection  might  have  spread  to  other  States,  as 
there  were  in  all  abundant  material  eager  to  take  advantage 
of  any  event  that  might  embarrass  or  defeat  the  action  of 
the  Government  A  united  front  on  the  part  of  all  the 
Northern  States  was  absolutely  essential  to  success.  Such 
a  front,  happily,  was  preserved  throughout  the  whole  war. 

The  plan  adopted  by  the  disloyal  members  of  the  Legis- 
lature of  Indiana  was  to  divest  the  Governor  of  all  power 
over  the  militia,  and  to  vest  the  control  of  the  same  in  a 
committee  of  their  own  creatures.  The}''  refused  to  pass 
the  necessary  appropriation  bills  till  their  schemes  should 
become  a  law.  To  defeat  their  plans  the  only  course  left  to 
the  loyal  members  was  to  retire  from  the  Legislature,  which 
they  did.  That  body,  consequently,  was  left  without  a 
quorum.  Their  retirement  put  an  end  to  the  iniquitous 
projects,  but  it  left  the  Governor  without  the  means  of 
5 


34 


preserving  the  credit  of  the  State.  It  was  held  by  the  Su- 
preme Court  of  the  State  that  without  a  special  act  he  could 
not  pay  the  interest  accruing  on  the  State  debt,  although 
it  had  been  previously  supposed  that  the  Constitution  of 
the  State  had  provided  for  such  a  payment  without  any 
special  law. 

In  this  emergency  Governor  Morton,  most  anxious  to  pre- 
serve the  honor  and  credit  of  the  State,  applied  to  me  to  ad- 
vance the  sums  necessary  for  the  purpose.  Unless  this  could 
be  done  he  felt  that  he  could  not  justify,  before  his  own 
State  and  the  country,  the  position  which  his  friends  in  the 
Legislature  had  taken  through  his  council  and  advice.  The 
application  was  made  at  the  darkest  period  of  the  whole  war. 
I  could  have  no  security  whatever,  and  could  rely  for  reim- 
bursement only  on  the  good  faith  of  a  Legislature  to  be 
chosen  at  a  future  and  distant  day,  and  upon  the  chances  of 
its  being  made  up  of  more  upright  and  patriotic  members 
than  those  composing  the  one  then  in  existence.  If  the 
great  contest  should  turn  out  disastrously  to  the  cause  of  the 
Union  and  of  freedom,  I  could  never  expect  to  be  repaid  a 
dollar.  I  felt,  however,  that  on  no  account  must  the  debt  of  a 
great  State  be  discredited,  nor  the  position  of  its  Chief  Magis- 
trate, the  ablest  and  most  efficient  of  all  the  loyal  Governors, 
and  who  of  all  contributed  most  to  our  success,  be  compro- 
mised or  weakened.  No  alternative  was  left  to  me  but  to 
advance  the  sums  required.  I  would  not  allow  myself  to 
be  responsible  for  the  consequences  of  a  refusal  of  his  re- 
quest. If  the  credit  of  the  State  in  such  a  critical  period 
should  be  destroyed,  that  of  the  other  States,  and  even  the 
Federal  Government,  might  be  so  impaired  as  to  render 
it  impossible  for  them  to  sustain  the  immense  burdens 
of  the  war.  Another  influence  of  very  great  weight  with 
me  was  an  ambition  to  maintain  the  credit  of  a  State  with 


35 


which  I  had  so  long  been  identified,  to  which  I  was  in- 
debted for  my  start  in  life,  and  for  whose  credit  in  former 
times  I  had  earnestly  labored.  The  last,  perhaps,  was  the 
ruling  motive.  I  accordingly  addressed  a  note  to  the  agent  of 
the  State  for  the  payment  of  the  interest,  offering  to  pay  that 
falling  due  July  1st,  1863,  and  requesting  him  to  supply  me 
with  a  list  of  the  holders  of  the  State  stocks.  He  perempto- 
rily refused  to  furnish  such  list,  being  himself  one  of  the  con- 
spirators in  destroying  the  State  credit.  A  list  had  to  be 
procured  from  other  sources  of  information.  As  soon  as  this 
was  obtained,  I  commenced  the  payment  of  interest,  which 
was  thereafter  promptly  paid  by  me  on  the  days  it  fell  due. 
These  payments  were  continued  two  years.  The  whole 
amount  advanced  by  me  on  this  account  was  $6-10,000.  In  the 
meantime  the  State  was  practically  without  a  Legislature. 
The  disloyal  members  were  constantly  in  the  expectation 
that  the  Governor  would  be  compelled  to  caJl  them  together, 
as  the  only  means  of  enabling  him  to  carry  on  the  govern- 
ment. The  Governor  well  knew  that  if  they  were  called 
together,  they  would  take  from  him  the  power  to  control  the 
militia  of  the  State,  and  he  determined  to  hold  out,  which 
he  did,  till  a  new  Legislature  should  be  chosen. 

The  following  extracts  taken  from  the  message  of  Gov. 
Morton,  made  to  the  General  Assembly  of  Indiana,  Jan.  6, 
1865,  gives  a  brief  and  succinct  history  of  the  efforts  made 
to  destroy  the  credit  of  the  State,  and  to  embarrass  its  action 
in  the  war,  and  of  the  aid  rendered  by  our  house  in  defeat- 
ing them : 

"Shortly  after  the  Legislature  adjourned,  the  question  was 
sprung  as  to  the  existence  of  legal  appropriations  for  the  pay- 
ment of  the  interest  upon  the  public  debt,  and  the  opinion  of 
the  Attorney  General  was  published,  denying  their  existence 
and  any  power  to  withdraw  the  money  from  the  Treasury  to 


36 


pay  the  interest,  which  opinion  was  indorsed  and  acted  upon 
by  Mr.  Ristine,  the  Auditor  of  State.  Believing  that  the 
question  had  its  origin  in  political  considerations,  and  that 
there  was  little  room  to  doubt  as  to  the  legal  right  and  duty 
of  the  Treasurer  to  remit  the  money  to  New  York  to  pay  the 
interest,  I  at  once  took  issue  with  these  gentlemen.  The  State 
had  failed  to  pay  the  interest  upon  her  bonds  from  1841  to 
1847,  during  which  time  she  acquired  a  reputation  for  repudi- 
ation and  bankruptcy,  from  which  she  only  recovered  after 
many  years  of  faithful  discharge  of  her  obligations.  The  dark 
cloud  which  had  thus  been  placed  upon  her  financial  character 
had  seriously  retarded  her  growth  in  wealth  and  population, 
deterring  emigration  from  other  States.  In  1846,  she  ef- 
fected a  compromise  with  most  of  her  creditors,  by  the  trans- 
fer of  the  Wabash  and  Erie  Canal  for  one-half  of  her  debt,  and 
issuing  new  stock  for  the  other  half,  upon  which  she  solemnly 
pledged  herself  to  pay  the  interest  semi-annually. 

This  pledge,  and  the  legislation  had  in  pursuance  of  the  com- 
promise, was  treated  by  Governor  Whitcomb,  and  the  various 
officers  of  State,  as  a  valid  appropriation  of  the  money  neces- 
sary to  pay  the  interest  under  the  old  Constitution,  which, 
upon  this  subject,  is  like  the  present.  In  1850  the  framers  of 
the  new  Constitution,  by  the  twentieth  section  of  the  tenth 
article,  solemnly  ratified  this  contract  with  the  bondholders, 
by  appropriating  all  the  revenue  of  the  State,  derived  from 
taxation  for  general  State  purposes,  after  defraying  the  ordi- 
nary expenses  of  the  State  government,  to  the  payment  of  the 
interest  and  the  liquidation  of  the  principal  of  the  public  debt. 
It  was  clearly  the  purpose  of  the  new  Constitution  to  place 
the  credit  of  the  State  beyond  the  contingency  of  dishonor  by 
acts  of  omission  or  prohibition  on  the  part  of  the  Legislature. 
Under  the  new  Constitution,  further  legislation  to  pay  the  in- 
terest was  not  deemed  necessary,  and  this  construction  was 
acted  upon  by  all  administrations  down  to  1863  ;  although, 
perhaps,  in  one  case,  a  formal  appropriation  was  made  with- 


37 


out  any  definite  purpose.  An  action  for  a  mandamus  against 
the  Auditor  was  commenced  by  Mr.  W.  H.  Talbott,  President 
of  the  Sinking  Fund  Board,  for  the  avowed  purpose  of  having 
the  question  settled,  which  was  carried  through  the  Circuit 
and  Supreme  Courts,  and  resulted  in  a  decision,  by  the  latter, 
against  the  existence  of  an  appropriation.  Without  intending 
any  disrespect  to  the  eminent  tribunal  by  which  this  case  was 
decided,  I  must  be  permitted  to  observe  that  the  history  of  its 
origin,  progress  and  conclusion  was  such  as  to  deprive  it  of 
any  moral  influence,  and  that  the  principles  upon  which  the 
decision  was  made  have  been  since  openly  disregarded  by  the 
Auditor  and  Treasurer  of  State  in  the  payment  of  large  sums 
of  money  to  the  Public  Printer.  But  leaving  out  of  view 
wholly  who  was  right  or  wrong  upon  the  legal  question,  it  was 
a  matter  of  the  first  importance  that  the  obligations  of  the 
State  should  be  promptly  met,  and  her  credit  rescued  from  the 
disaster  of  a  new  dishonor.  It  had  received  a  shock  in  the 
discovery  and  exposure  of  the  Stover  forgery  of  our  State 
stocks  amounting  to  nearly  three  millions  of  dollars,  from  the 
evil  consequences  of  which  it  was  relieved  only  by  a  deter- 
mined effort  on  the  part  of  the  State  authorities  to  bring  the 
criminals  to  justice.  ISTo  argument  was  required  to  prove  that, 
should  it  again  become  impaired  by  a  serious  failure  upon  the 
part  of  the  State  to  meet  her  engagements,  it  could  not  be  re- 
stored during  this  generation,  and  the  progress  of  the  State  in 
wealth  and  population  would  receive  a  serious  check.  Deter- 
mined, if  possible,  to  avert  the  threatened  calamity,  I  went  to 
New  York  and  laid  the  whole  matter  before  the  house  of 
Messrs.  Winslow,  Lanier  &  Co.,  with  the  request  that  they 
should  advance  the  amount  necessary  to  pay  the  interest,  until 
such  time  as  the  Treasury  might  be  unlocked,  and  the  money 
obtained  therefrom.  My  request  was  generously  met,  and, 
after  full  consideration,  acceded  to,  provided  a  correct  list  of 
the  stockholders  could  be  obtained.  It  is  proper  to  state  that, 
in  making  this  arrangement,  no  stipulation  was  asked  for  or 


38 


given,  in  regard  to  the  compensation  they  should  receive  for 
the  use  of  their  money,  and  the  risk  and  trouble  they  should 
incur ;  but  the  whole  matter  was  referred  to  the  future  action 
and  good  faith  of  the  State.  They  at  once  notified  John  C. 
Walker,  Agent  of  State,  of  their  readiness  to  pay  the  interest, 
and  asked  him  to  furnish,  from  his  books,  a  list  of  the  stock- 
holders, for  the  making  out  of  which  they  offered  to  pay.  This 
he  peremptorily  refused,  and  denied  access  to  his  books,  from 
which  they  desired  to  copy  the  list.  They  then  proposed  to 
him  that  he  should  pay  the  interest  in  the  usual  way  upon  his 
own  books,  agreeing  to  honor  his  checks,  issued  therefor,  at  the 
same  time  exonerating  him  from  all  personal  liability  for  any 
moneys  so  paid.  This  offer  was  likewise  refused.  The  coi're- 
spondence  between  Winslow,  Lanier  &  Co.  and  Walker  upon 
this  subject,  is  herewith  submitted  for  your  consideration. 

As  Messrs.  Winslow,  Lanier  &  Co.  would  not  take  the  re- 
sponsibility of  paying,  in  the  absence  of  a  correct  list,  owing 
to  the  existence  of  a  large  amount  of  spurious  stock,  which 
otherwise  they  had  no  means  of  detecting,  the  interest  which 
fell  due  on  the  first  day  of  July,  1863,  went  unpaid.  Deter- 
mined not  to  be  defeated,  if  possible,  in  the  effort  to  preserve 
the  credit  of  the  State,  I  attempted  to  secure  from  other  sources 
a  correct  list  of  the  stockholders,  and  in  this  attempt  succeed- 
ed, in  November.  In  the  meantime  the  necessity  for  action 
had  become  more  manifest  and  imperative  than  before.  While 
the  American  stockholders  had  a  correct  knowledge  of  the 
state  of  affairs,  and  but  few  stocks  were  changing  hands  or 
being  offered  in  the  market,  the  case  was  quite  different  with 
our  stockholders  in  Europe.  In  Europe,  American  politics  are 
always  badly  understood,  and  the  principal  fact,  which  they 
clearly  comprehended  was,  that  they  did  not  receive  their  in- 
terest. They  associated  this  failure  with  that  of  1841,  and 
began  to  say  that  there  was  some  strange  fatality  attending 
Indiana  securities,  and  declared  their  intention  of  sending 
them  back  to  America  and  getting  clear  of  them  at  once  and 


39 


forever.  Such  a  measure  would  have  given  the  State  a  bad 
name  abroad,  seriously  affecting  emigration  to  her  borders, 
and  would  have  been  followed  by  great  depi-eciation  and  loss 
of  credit  throughout  the  United  States. 

Having  presented  the  list  to  Messrs.  Winslow,  Lanier  &  Co., 
they  promptly  renewed  their  offer,  and  gave  public  notice  that 
they  would  pay  the  back  interest  which  fell  due  in  July,  and 
afterward  gave  further  notice  that  they  would  pay  the  interest 
accruing  on  the  1st  day  of  January,  1864  ;  the  1st  day  of  July, 
1864,  and  the  1st  day  of  January,  1865  ;  and  up  to  the  31st  of 
November  last,  as  I  am  advised,  had  paid  out  four  hundred 
and  sixteen  thousand  six  hundred  and  seventy-seven  dollars 
and  eight  cents. 

How  much  they  have  paid  since  the  1st  of  January,  1865,  I 
am  not  advised,  but  presume  it  will  make  the  aggregate  as 
much  as  five  hundred  and  seventy-five  thousand  dollars.  The 
noble  and  generous  conduct  of  this  house  should  and  will  be 
appreciated  by  the  people  of  Indiana ;  and  Mr.  Lanier,  in  his 
clear  comprehension  and  able  management  of  the  affair,  has 
displayed  not  only  financial  ability,  but  a  broad  statesmanship 
not  often  exhibited  in  financial  affairs. 

I  trust  that  the  generous  confidence  which  he  has  reposed  in 
the  good  faith  of  the  people  of  Indiana  will  not  be  disap- 
pointed, and  that  the  Legislature  will  hasten  to  reimburse  him 
for  the  money  he  has  expended,  and  indemnify  him  for  the  use 
of  it,  and  for  the  trouble  he  has  incurred. 

In  conclusion,  upon  this  subject,  lam  glad  to  be  able  to  say, 
that  the  credit  of  the  State  has  been  fully  preserved ;  and 
that  her  stocks  now  command  a  higher  price,  relatively,  in  the 
market,  when  compared  with  stocks  of  other  States,  bear- 
ing like  interest,  than  at  any  former  period  in  her  history." 

In  1864,  the  Presidential  election  again  took  place.  Mr. 
Lincoln  was  a  candidate  for  re-election  to  the  Presidency  of 
the  United  States,  as  was  Mr.  Morton  for  the  governorship 


40 


of  Indiana.  This  State  was  one  of  the  first  to  vote  in  the 
fall  elections  of  that  year.  Its  action,  in  view  of  the  events 
that  had  occurred  in  it,  could  not  fail  to  be  regarded  as  the 
key-note  of  the  campaign,  if  not  conclusive  of  the  great  con- 
test that  was  speedily  to  follow.  In  that  State  the  canvass 
necessarily  turned  upon  the  extraordinary  condition  of  things 
that  had  existed  in  it  for  two  years ;  upon  the  policy  of  the 
Union  party  in  breaking  up  the  Legislature  ;  the  refusal  of 
the  Governor  to  reassemble  it,  and  upon  the  responsibility 
he  assumed  of  paying  the  interest  on  the  State  debt  without 
provision  of  law.  One  of  the  ablest  men  in  the  State  was 
nominated  as  his  opponent.  The  two  canvassed  the  State, 
Governor  Morton  in  vindication,  and  his  competitor  in 
condemnation,  of  the  policy  and  course  that  had  been  pur- 
sued. It  was  a  contest  in  which  Mr.  Lincoln  took  a  very 
deep  interest,  not  only  from  its  significance  in  reference  to 
his  own  election,  but  from  the  interest  he  took  in  that  of  Mr. 
Morton,  who,  of  all  the  civilians  in  the  United  States,  prob- 
ably rendered  the  most  efficient  and  valuable  service  in  put- 
ting down  the  great  rebellion. 

In  the  canvass  before  the  people,  Mr.  Morton  acquitted 
himself  with  transcendent  ability.  Mr.  Lincoln,  in  reading  a 
report  of  the  speech  of  Mr.  Morton,  by  which  it  was  opened, 
said,  "That  settles  the  Presidential  election."  The  result 
fully  justified  his  expectation.  Mr.  Morton  every  where  car- 
ried the  people  with  him,  and  upon  no  issues  more  heartily 
than  in  their  approval  of  the  policy  of  the  Union  party, 
which,  to  avert  a  greater  evil,  had  left  the  State  without 
a  Legislature  for  two  years,  and  of  the  steps  by  which  its 
faith  and  good  name  had  been  maintained.  He  was 
elected  by  more  than  20,000  majority,  in  the  most  heated 
canvass  ever  known  in  the  State.  The  result  there  turned 
public  sentiment  everywhere  in  favor  of  the  Administration  ; 


41 


and  in  the  following  month,  Mr.  Lincoln  was  elected  to  the 
Presidency  by  the  almost  unanimous  voice  of  the  North. 

At  the  State  election  for  186-4  a  majority  of  Union  mem- 
bers were  returned  to  the  Legislature,  by  whom  provision 
was  made  for  the  repayment  of  the  sums  I  had  advanced, 
with  no  other  compensation  than  interest  on  the  amount, 
which  was  all  I  desired  or  would  have  received.  I  had,  how- 
ever, the  most  gratifying  proofs  of  the  esteem  which  my 
action  had  secured  for  me  throughout  the  State.  Every 
loyal  man  felt  that  I  had  averted  a  disgrace  in  which  he 
must  have  shared.  The  effect  upon  the  politics  of  the  State 
was  decisive.  It  has  ever  since  been  a  steady  supporter  of 
the  Union  cause.  At  the  next  vacancy  occurring  in  the 
Senate  of  the  United  States,  Mr.  Morton  was  chosen  to  fill 
the  place,  which  he  now  holds  in  a  manner  both  honorable 
to  himself  and  the  State. 

I  omitted  to  mention,  in  its  proper  order,  my  connection 
with  the  adjustment  of  the  debt  of  the  State  of  Indiana  in 
1847.  As  already  remarked,  that  State  had  previously 
embarked  in  elaborate  systems  of  public  works,  the  means 
for  the  prosecution  of  which  were  wholly  raised  by  sales  of 
bonds.  In  the  embarrassments  which  followed,  the  State 
made  default  in  the  payment  of  interest  on  these  bonds,  and  re- 
mained in  default  till  the  amount  due  reached  the  sum  of  about 
$12,000,000,  of  which  some  $4,000,000  were  for  interest.  At 
the  session  of  the  Legislature  of  the  State  for  1846  7,  an 
act  was  passed  for  an  adjustment  of  the  debt,  commonly 
called  the  "  Butler  Act,"  authorizing  an  issue  to  the  holders 
of  the  old  bonds,  of  a  five  per  cent,  inscribed  State  Stock, 
to  an  amount  equaling  one  half  that  of  said  bonds ;  and  a 
transfer,  to  Trustees,  for  the  benefit  of  the  bondholders,  of 
the  Wabash  and  Erie  Canal,  with  the  lands  belonging  to 
6 


42 


the  same,  upon  the  condition  of  the  surrender  of  the  old 
bonds — the  payment  of  the  other  half  of  these  bonds  being 
chargeable  upon  the  canal  and  its  revenues. 

It  became  necessary,  therefore,  that  some  person  should 
visit   Europe  for  the  purpose  of  explaining  the  financial 
condition  of  the  State,  to  secure  the  assent  of  such  bondhold- 
ers as  had  not  acceded  to  the  proposition  made  them,  and 
to  make  the  exchanges  of  securities.      I  was  appointed  to 
this  mission,  and  proceeded  to  Europe  early  in  the  summer 
of  1847.     The  new  securities  to  be  issued,  viz.  :  the  certifi- 
cates of  State  stock,  and  of  ownership  in  the  canal,  were 
placed  in  my  hands  fully  executed,  with  the  exception  of 
dates,  amounts,  and  names  of  parties  to  whom  they  were  to 
be  issued.     These  I  was  authorized  to  insert  on  making  the 
exchanges.     I  was  accredited  to  Sir  J.  Horsley  Palmer,  then 
G-overnor  of  the  Bank  of  England — a  staunch  friend  of  the 
United  States,  and  whose  place  of  business  in  London  I 
made  my  headquarters  ;  to  Baron  N.  M.  Rothschild,  of  Lon- 
don ;  to  Baron  James  Rothschild,  of  Paris ;  to  the  house  of 
Hope  &  Company,    of  Amsterdam — these   parties,    or   the 
houses  with  which  they  were  connected,  holding  or  controll- 
ing large  amounts  of  the  bonds.     Immediately  upon  my 
arrival  in  London,  I  prepared  and  published  a  statement 
embodying  the  plan  of  settlement  proposed,  and  urging,  with 
what  arguments   I   could  adduce,    its  acceptance.     My  du- 
ties brought  me  into  intimate  contacl  with  the  gentlemen 
named,  and  also  with  Mr.  Labouchere,  then  manager  of  the 
house  of  Hope  &  Co.,  of  Amsterdam.    I  had  occasion,  in  the 
execution  of  my  mission,  to  visit,  several  times,  the  cities 
named,  and  also  Geneva,  Switzerland,  where  some  of  the 
State  bonds  were  held.     The  result  was,  that  I  was  enabled 
to  get  up  nearly  all  the  outstanding  bonds,  and  was  in  this 
way  instrumental  in  placing  the  credit  of  the  State  on  the 


43 

firm  basis  upon  which  it  has  ever  since  rested.  The  State 
immediately  entered  upon  a  career  of  prosperity  which  has 
never  flagged  to  the  present  moment.  A  virtual  repudiation 
had  destroyed  its  public  spirit,  and  had  been  a  bar  to  capital 
and  immigration  coming  into  it.  Since  the  funding  of  the 
debt,  no  state  in  the  Union  has  made  more  rapid  progress 
than  Indiana.  It  has  constructed  3,000  miles  of  railroad. 
These  works  now  penetrate  every  portion  of  its  territory. 
Its  debt  has  been  almost  wholly  paid  to  the  holders,  by  tax- 
ation, or  from  the  proceeds  of  the  school  fund  arising  from 
the  profits  accruing  from  the  interest  of  the  State  in  the 
State  Bank.  The  benefits  resulting  from  the  adjustment  of 
this  debt  have  been  almost  incalculable. 

I  was  not  only  successful  in  my  mission,  but  I  had  a  most 
agreeable  visit — my  first  to  Europe.  I  was  most  kindly  re- 
ceived by  all  the  parties  to  whom  I  was  accredited,  and  by 
others.  Mr.  Labouchere's  ancestors,  like  my  own,  were  Hu- 
guenots, and  were  driven  out  of  France  about  the  same  time 
that  mine  were,  and  for  a  similar  cause — adherence  to  the 
principles  of  the  Eeformation.  His  ancestors  fled  to  Holland ; 
mine  to  America.  A  kindred  ancestry,  as  it  were,  and  a 
kindred  experience  brought  us  into  close  sympathy.  Sir 
Horsley  Palmer  also  treated  me  with  gratifying  attention,  and 
invited  me  to  his  princely  country  seat  at  Fulham,  on  the 
Thames,  a  few  miles  from  London.  The  acquaintances  I 
then  made  were  of  immense  service  to  me  in  the  business 
in  which  I  subsequently  engaged,  and  have  added  greatly  to 
the  pleasure  of  subsequent  visits  to  England  and  to  the  Con- 
tinent. 

On  my  return  home  I  delivered  up  the  bonds  I  had  taken 
up,  together  with  the  unused  certificates  of  State  and  Canal 
Stock.  My  accounts  were  settled  most  satisfactorily,  and  I 
received  the  thanks  of  the  State  authorities  for  the  manner  I 
had  executed  the  trust  confided  to  me. 


44 

In  1865,  as  I  was  about  to  visit  Europe,  I  received  com- 
munications, copies  of  which  I  gave  elsewhere,  from  the 
Secretary  of  the  Treasury  and  the  Secretary  of  State  of  the 
United  States,  requesting  me  to  act,  in  its  behalf,  in  explain- 
ing to  capitalists  abroad  the  character  of  our  public  debt  and 
the  means  and  disposition  of  our  people  for  its  payment. 
This  mission  I  undertook  with  earnestness,  being  fully  per- 
suaded that  no  better  securities  could  be  made  than  these 
of  the  United  States.  This  conviction  I  sought,  with  what- 
ever power  I  possessed,  to  impress  upon  others.  At  Frank- 
fort-on-the-Maine,  I  was  formally  invited  to  address  a  public 
meeting  of  Bankers  and  Capitalists  upon  the  subject  of  my 
mission.  It  was  largely  attended,  and  I  had  an  opportunity 
not  only  to  submit  some  detailed  remarks,  but  for  a  free  and 
full  conference  with  gentlemen  composing  the  meeting, 
nearly  all  of  whom  could  speak  my  native  tongue.  My 
remarks  were  published  in  German  and  English,  and  freely 
distributed,  through  the  Consulates,  throughout  the  Continent 
and  England.  I  believe  they  were  instrumental  of  much 
good  as  they  embodied  the  arguments  in  favor  of  our 
securities  in  a  concise  form,  and  in  one  that  had  not  been 
previously  presented,  and  one  that  could  be  used  by  others, 
particularly  my  own  countrymen,  equally  with  myself.  Of 
these  I  annex  a  copy  : 

"  Remarks  of  Mr.  J.  F.  D.  Lanier,  made  at  a  Meeting  op 
Bankers  and  Capitalists,  at    Frankfort-on-the-Maine, 

ON   THE    14tll    DAY    OF    SEPTEMBER,   1865. 

The  national  debt  of  the  United  States,  on  the  first  of 
August  of  the  present  year,  was,  in  round  numbers,  $2,720,- 
000,000,  to  wit : 

Debt  bearing  interest  payable  in  gold  -  -  -  $1,108,000,000 
"  "  "  "  in  currency  -  1,053,000,000 
"  "         no  interest 559,000,000 


45 

It  is  estimated,  upon  the  most  competent  authority,  that  the 
national  debt,  after  all  the  expenses  of  the  war  are  finally 
liquidated,  will  not  exceed  $3,000,000,000. 

The  revenues  of  the  Government  for  the  fiscal  year  ending 
June  30,  1865,  were  $318,251,589  10,  of  which  $82,000,000 
were  in  gold,  from  Customs. 

The  revenues  for  the  fiscal  year  ending  June  30,  1866, 
were  estimated  at  $396,000,000,  of  which  $80,000,000  will  be 
in  gold  from  Customs,  $300,000,000  from  internal  taxes,  and 
$16,000,000  from  lands  and  miscellaneous  sources. 

The  interest  on  the  entire  national  debt  of  $3,000,000,000  is 
estimated  at  $165,000,000,  leaving  $231,000,000  for  the  ex- 
penses of  the  Federal  Government  and  other  purposes. 

These  estimates  were  made  in  June  last,  at  the  commence- 
ment of  the  fiscal  year.  Since  that  time  the  receipts  from 
Customs  have  increased  so  rapidly,  that  instead  of  $80,000,000, 
as  estimated,  the  revenue  from  this  source,  in  gold,  may  reach 
$130,000,000. 

This  increase  is  largely  owing  to  the  trade  which  has  been 
opened  up  at  the  South  since  the  suppression  of  the  rebellion. 
Although  the  war  destroyed  for  a  time  the  commerce  and  in- 
dustry of  this  section,  and  deprived  the  people  of  the  ability 
to  maintain  their  railroads  and  to  navigate  their  rivers,  and 
left  them  little  but  the  cotton  which  had  been  accumulated, 
this  is  found  to  be  sufficient  to  furnish  a  very  large  amount  of 
means  with  which  to  supply  their  wants,  and  lay,  anew,  the 
foundations  of  their  prosperity.  The  receipts  of  cotton  from 
the  South,  at  New  York,  equal  20,000  bales  weekly,  and  have 
been  followed  by  corresponding  exports  to  that  section  of 
supplies,  and  whatever  is  necessary  to  the  restoration  and 
development  of  its  resources. 

The  national  debt  of  England  at  the  end  of  the  war  with 
France,  in  1816,  amounted  to  $4,205,000,000.  It  has  since 
been  reduced  only  $250,000,000.  It  equaled  $218  20  to  each 
individual,  and  40*  per  cent,  of  the  aggregate  value  of  the 


^r 


46 


whole  property  of  the  Kingdom.  Since  the  battle  of  Water- 
loo her  wealth  has  grown  at  a  slow  but  steadily  increasing 
rate — from  20  per  cent,  in  the  first,  to  41  per  cent,  in  the  last 
ten  years,  thereby  reducing  the  burden  of  the  debt  from  40!4;, 
per  cent,  on  the  national  wealth,  to  12  per  cent. 

The  census  of  1860  showed  the  wealth  of  the  loyal  States 
to  be  $10,716,000,000,  and  a  yearly  product  $2,870,000,000 
in  value,  or  26|-  per  cent,  of  their  aggregate  capital. 

The  wealth  of  the  loyal  States  increased,  in  the  ten  years 
between  1850  and  1860,  at  the  rate  of  126  per  cent.,  or  8^ 
per  cent,  per  annum.  Assuming  these  amounts  and  rates  as  a 
basis,  we  have  for  June,  1865,  a  wealth  of  $16,112,000,000, 
and  an  annual  product  of  $4,318,000,000,  without  making  any 
estimates  on  exports. 

In  1833  the  national  wealth  of  England  was  estimated  at 
$17,200,000,000.  For  the  United  States  the  figures  given  are 
by  no  means  estimates,  but  are  results  accurately  obtained 
throuo-h  the  Census  Bureau.  These  results  enable  us  to  esti- 
mate  the  amount  of  the  national  wealth  at  the  close  of  future 
periods,  to  wit : 

In  1870  the  national  wealth  will  equal     -     -     $24,218,000,000 
In  1880  "  "  "  -     -       48,436,000,000 

In  1881  "  "  "  -     -       51,516,000,000 

In  the  last-named  year,  consequently,  the  interest  on  the 
national  debt  of  $3,000,000,000,  will  equal  only  3^0  per  cent, 
of  the  national  wealth. 

This  estimate  of  the  reduced  percentage  of  the  interest  of 
the  national  debt  in  ratio  to  the  national  wealth,  is  made  upon 
the  rate  of  increase  of  national  wealth  prior  to  the  rebellion. 

On  this  calculation,  what  will  be  the  increase  for  the  next 
sixteen  years  ?  Let  us  look  a  little  more  carefully  into  this 
question.  During  the  last  ten  years  the  increase  of  wealth  in 
nine  of  the  North-western  States  and  Territories  of  the  Unit- 
ed States   was  not  less  than  41 1^  per  cent. — the  aggregate 


47 


increase  being  from  $452,500,000  to  $1,862,000,000.  Four 
new  Territories,  which  did  not  appear  in  the  census  of  1850, 
had  a  valuation  in  1860  of  $98,000,000.  Those  since  organ- 
ized— Dacotah,  Nevada,  Colorado,  Arizona  and  Idaho — are 
not  embraced  in  this  estimate.  These  last-named  States  and 
Territories  are  as  rich  in  precious  metals  of  all  kinds  as  was 
California. 

As  another  important  source  of  wealth  and  revenue,  the 
United  States  still  holds  950,000,000  of  acres  of  unsold  lands 
which,  now  that  the  war  is  closed,  will  soon  come  into  market, 
and  which  should  bring  $1,000,000,000  into  the  public 
Treasury. 

But  what  is  of  vastly  greater  importance  is  the  rapidly  in 
creased  value  of  these  lands,  consequent  upon  their  occupation 
and  settlement.  The  taxable  value  of  property  in  the  North- 
western States,  as  has  been  shown,  increased  at  the  rate  of 
411*  per  cent,  from  1850  to  1860.  In  1880  this  value  will 
be  thirty  times  greater  than  it  was  in  I860,  and  form  the  basis 
of  a  revenue  infinitely  greater  than  what  could  be  derived 
from  the  sale  of  their  lands ;  so  that  if  every  dollar  derived 
from  this  source  should  be  bestowed  upon  the  new  States  by 
the  Federal  Government,  in  aid  of  internal  improvements  and 
for  educational  purposes,  their  taxable  wealth  and  the  revenue 
derived  from  them  would  soon  exceed  many  times  the  sums  so 
bestowed.  It  is  not  only  in  what  we  now  possess,  but  what  we 
are  capable  of  accomplishing,  that  our  strength  lies. 

Our  minerals  are  another  vast  source  of  yet  undeveloped 
wealth.  At  least  1,000,000  square  miles  of  our  territory  are 
surpassingly  rich  in  gold,  silver,  copper,  lead,  quicksilver,  coal, 
gypsum,  salt,  etc.,  etc.  From  their  recent  discovery  our  gold 
and  silver  deposits,  except  in  California,  have  hardly  begun  to 
be  worked.  Were  they  worked  even  to  the  extent  that  they 
are  in  that  State,  they  would  produce,  it  is  estimated,  at  least 
$200,000,000  annually,  while  the  other  minerals  named  would 
yield  at  least  one-half  this  sum,  were  proper  means  of  trans- 


48 


portation  and  communication  provided.  Such  results  are  not 
probabilities  of  a  far  distant  future  ;  their  accomplishment  is 
sufficiently  near  to  be  an  all-important  element  in  enabling  the 
country  to  bear  the  burdens  imposed  upon  it.  They  are,  in  fact, 
the  necessary  and  inevitable  consequence  of  the  progress  of  a 
people  who  already  number  34,000,000  souls — who  double  their 
population  every  twenty-three  and  a  half  years — who  possess 
every  implement  and  contrivance  that  science  and  art  have  con- 
tributed in  aid  of  labor — who  are  urged  forward  by  a  resistless 
spirit  of  enterprise,  confident  of  their  future,  and  of  their  ability 
to  surmount  all  obstacles  that  may  oppose  their  way.  Such  a 
people  may  be  safely  entrusted  with  the  greatest  responsibili- 
ties, and  are  equal  to  any  emergency  in  which  they  may  be 
placed. 

But  upon  the  future  growth  of  these  undeveloped  territories 
we  by  no  means  place  our  confidence  of  the  ability  of  our 
people  to  bear  the  burdens  imposed  upon  them.  The  aggre- 
gate increase  of  the  wealth  of  the  older  States  has  been 
vastly  greater,  though  the  ratio  of  the  increase  may  not  have 
been  so  great.  That  of  Ohio  has  increased  within  ten  years 
at  the  rate  of  126  per  cent.,  although  the  State  was  founded  77 
years  ago  ;  that  of  the  States  of  New  Jersey  and  Connecticut, 
though  founded  more  than  two  centuries  ago,  increased  in  a 
like  rate  ;  that  of  Pennsylvania  increased,  within  the  same 
period,  at  the  rate  of  96  per  cent.,  upon  the  already  large 
aggregate  of  $722,000,000. 

For  the  last  four  years  the  Northern  States  supplied  all  the 
means  for  carrying  on  the  war,  and  for  defraying  the  expendi- 
tures of  Government.  We  are  fast  being  relieved  of  the 
former,  at  the  same  time  that  the  States  recently  in  rebellion 
are  now  contributing  their  proportion  to  our  already  diminish- 
ed burdens.  These  are  soon  to  be  reduced  more  than  one 
half,  while  our  increased  means  from  an  united  country  must 
exceed  by  at  least  one-third  what  they  have  been.  By  the 
census  of  1860  the  wealth  of  the  Southern  States  equaled 


40 


$3,467,000,000.  In  the  period  of  five  years,  from  1855  to  1860, 
they  doubled  the  value  of  their  products.  They  will,  in  a 
very  short  time,  be  restored  to  a  condition  of  prosperity  far 
exceeding  anything  in  their  former  experience.  The  great 
drawbacks  to  the  proper  development  of  their  resources  have 
been  removed.  They  possess  all  the  blessings  and  advantages 
— which  cannot  be  overestimated — of  a  temperate  zone  and  of 
a  semi-ti-opical  climate.  What  they  have  lacked  have  been 
population,  skilled  labor,  a  spirit  of  enterprise,  and  the  mani- 
fold industries  of  free  institutions;  all  these  essentials  to  pros- 
perity have  been  secured  to  them  by  the  war. 

A  short  period,  therefore,  only  is  required  for  the  realization 
of  the  promise  which  our  natural  wealth  and  resources  afford. 
Taking  the  past  as  a  basis  of  calculation  for  the  future,  the 
United  States,  in  18S0,  will  have  a  population  of  60,000,000, 
and  a  national  wealth  of  160,000,000,000.  It  will  then  not 
only  be  able  to  meet  the  interest  on  the  public  debt,  but  will 
be  able  to  discharge  it  with  entire  ease — and,  true  to  our  his- 
toric policy,  will  undoubtedly  do  so.  The  national  wealth  of 
Great  Britain,  in  1816,  was  only  half  as  great  as  is  that  of  the 
United  States  at  the  present  time,  yet  its  debt  has  already 
been  reduced  from  40  to  12  per  cent,  of  its  wealth.  That  of 
the  United  States  in  1880,  will  be  only  5  per  cent,  of  its 
wealth,  should  the  amount  of  the  debt,  in  the  meantime,  re- 
main um'educed. 

Should  revenues  additional  to  these  already  provided  be 
required,  they  may  be  easily  raised  by  taxes  levied  upon  cotton 
and  tobacco  and  other  articles  of  the  re-established  Union,  of 
which  we  monopolize  the  production  of  the  world.  It  is  esti- 
mated that  our  revenue  may  be  increased  from  these  sources 
from  $60,000,000  to  $100,000,000,  without  any  diminution  in 
the  consumption  of  the  articles  taxed,  and  without  injury  to 
our  commerce  or  to  any  domestic  interest. 

The  manner  in  which  the  obligations  of  the  United  States 
are  held  should  add  greatly  to  the  confidence  of  foreigners  in 


50 


them.  Of  the  whole  amount  outstanding,  not  more  than 
$300,000,000,  or  one-tenth  of  the  whole,  are  held  abroad.  All 
classes  at  home,  poor  as  well  as  rich,  have  invested  their  sav- 
ings in  them.  Very  large  amounts  are  held  in  sums  not  ex- 
ceeding $50.  Preference  is  universally  given  to  them  over  all 
other  kinds  of  investment.  No  national  loan  was  ever  so  uni- 
versally distributed.  Each  citizen  felt  himself  a  party  to  the 
contest,  and  contributed  to  it  according  to  his  ability.  All, 
consequently,  are  directly  interested  in  maintaining  inviolate 
the  public  faith. 

It  is  a  great  error  to  suppose  that  the  Northern  States  have 
been  exhausted  in  consequence  of  the  war.  There  is  most 
convincing  proof  to  the  contrary  in  the  ease  and  readiness 
with  which  they  have  supplied  the  Government  with  money, 
and  whatever  was  necessary  for  its  prosecution,  and  have 
absorbed  the  vast  debt  that  has  been  created.  The  Govern- 
ment has  neither  directly  nor  indirectly  borrowed  a  dollar  in 
Europe.  The  bonds  that  have  found  their  way  there  have 
gone  in  the  regular  course  of  trade. 

The  vast  demand  created  by  the  war  for  munitions,  materi- 
als and  supplies  of  all  kinds,  gave  to  the  agriculture  of  the 
West  and  the  manufactures  of  the  North  a  wonderful  impulse, 
which  still  continues.     The  resources  of  those  sections  remain 
not  only  unimpaired,  but  have  been  greatly  augmented.    Great 
as  are  their  burdens,  the  people  feel  themselves  perfectly  able  to 
bear  them,  and  that  they  have  an  ample  equivalent  for  them 
of  a  nature  far  transcending  mere  material  advantages.     They 
have  for  the  first  time  established  their  nationality  upon  an 
immutable  basis.     They  have  removed  the  great  source  of  dis- 
cord and  alienation — slavery — and  they  are  infinitely  stronger 
and  more  united  than  ever  before.     Under  the  able  and  judici- 
ous administration  of  our  affairs,  the  nation  has  started  anew 
on  a  career  of  growth  and  jarosperity  unexampled  in  its  own 
history,  or  in  that  of  any  other  people. 

The  nation  has  pledged  its  honor  for  the  fulfilling  of  all  its 


51 


obligations.  Success  has  given  a  full  equivalent  for  them. 
Its  wonderful  experience  has  served  to  give  confidence  in  and 
ability  for  the  future,  and  no  one  who  considers  our  means, 
our  present  position,  or  the  guarantees  of  the  past,  can  doubt 
the  payment  of  our  national  debt." 

On  my  return  home  I  received  not  only  the  thanks  of  the 
Government  for  the  services  I  had  rendered,  but  gratifying 
evidences  of  appreciation  of  them  from  private  individuals. 
I  annex  the  following  Associated  Press  Report  of  my  inter- 
view with  the  President  and  Secretary  of  the  Treasury,  on 
presenting  my  report : 

"Washington,  Friday,  Nov.  3,  1865. 

Mr.  J.  D.  F.  Lanier,  the  well-known  banker  of  New  York, 
who  recently  returned  from  Europe,  whither  he  went  some 
time  ago  on  a  confidential  mission  for  the  Government  in  con- 
nection with  the  national  finances,  yesterday  had  an  interview 
with  the  President  and  the  Secretary  of  the  Treasury,  to 
whom  he  submitted  a  report  of  the  results  of  his  mission.  Mr. 
Lanier  everywhere  found  the  best  of  feeling  prevailing,  in  finan- 
cial circles,  with  relation  to  the  United  States,  particularly  on 
on  the  Continent,  and  great  confidence  in  our  public  securities. 
At  Frankfort-on-the-Maine  he  addressed,  at  length,  a  large  meet- 
ing of  capitalists,  embracing  representatives  from  nearly  every 
leading  house  in  Germany.  The  complete  and  utter  over- 
throw of  the  rebellion  was  a  matter  of  equal  surprise  and  con- 
gratulation, and  the  demonstration  made  of  the  power  and 
wealth  of  the  North  was  a  subject  of  unusual  admiration. 
But  the  Avar  being  ended,  the  expectation  was  confidently 
expressed  by  the  European  holders  of  our  securities,  that  we 
would  immediately  commence  a  return  toward  specie  pay- 
ments, however  gradual  the  progress  in  such  direction  might 
be.  Such  a  step,  it  was  represented,  was  absolutely  necessary 
to  the  maintenance  of  confidence  in  our  securities  and  in  the 


52 


policy  of  the  Government.  The  ability  of  the  country  to  bear 
all  the  burdens  of  the  war  was  not  questioned,  especially  with 
the  rapid  progress  of  the  work  of  Reconstruction,  which  bids 
fair  to  restore  political  and  social  amity  to  every  portion  of 
the  country.  With  a  wise  and  correct  policy,  there  will  be  no 
limit  to  the  demand  for  our  securities,  not  only  on  the  Conti- 
nent, but  in  England,  where  our  military  successes  were  fast 
opening  the  eyes  of  their  people  as  to  the  value  of  our  bonds. 
But  the  feeling  against  any  further  increase,  and  in  favor  of  a 
steady  contraction  of  the  currency,  was  universally  expressed 
as  the  sole  condition  on  which  our  credit  abroad  could  be 
maintained.  It  is  understood  that  the  views  of  Mr.  Lanier 
were  heartily  responded  to,  both  by  the  President  and  the 
Secretary  of  the  Treasury." 

I  also  annex  a  copy  of  a  letter  received  from  Hon. 
Samuel  Hooper,  M.  C.  : 

Thirty-eighth  Congress, 
House  of  Representatives, 
Washington  City,  Dec.  24,  1865. 

My  Dear  Sir — I  have  to  thank  you  for  your  kindness  in 
sending  me  a  printed  copy  of  your  remarks  recently  made  at 
a  meeting  of  European  capitalists  at  Franklbrt-on-the-Maine, 
which  I  have  read  with  much  interest  and  with  most  hearty 
approval  of  them. 

I  consider  you   entitled  to  the  thanks  of  all  loyal  men  for 
them  ;  and  I  congratulate  you  on  the  results  which  so  soon 
after  added  confirmations  to  your  statements. 
With  great  respect,  I  am, 

Your  ob'd't  servant, 

J.  F.  D.  Lanier,  Esq.  (Signed)     S.  Hooper. 

Since  the  date  of  the  above  remarks,  I  have  had,  in  com. 
mon  with  every  American  citizen,  the  gratification  of  wit- 
nessing  an    uninterrupted    improvement    of   our   national 


53 


credit.  All  that  I,  or  others,  could  do  was  to  present  the 
evidence  upon  which  this  appreciation  has  been  based,  and 
show  what  we  were  and  what  the  future  must  do  for  us. 
But  even  my  anticipations  have  been  far  exceeded  by  the 
result. 

In  this  connection  I  also  copy  the  following  article  from 
the  New  York  Times  newspaper,  of  January  19,  1866 : 

"OUR  financial  position  abkoad. 

The  effects  of  our  great  struggle  are  beginning  to  be  felt  in 
Europe  at  the  moment  we  are  emerging  from  them  here.  The 
wave  set  in  motion  is  moving  round  the  world,  uniform  in  its 
course  and  resistless  in  its  power.  We  have  demonstrated 
that  the  nationality  of  a  Republic,  based  solely  upon  the  convic- 
tion of  its  value,  is  far  more  firmly  grounded  in  the  hearts  of  the 
people  than  institutions  based  upon  tradition,  and  fortified  by 
pride  of  ancestry  and  the  recollection  of  great  deeds  ;  or  by 
that  uniformity  of  life  and  character  which  ages  alone  can 
produce.  Foreigners,  for  the  first  time,  realize  that  we  are  a 
Nation,  with  an  ideal  palpable  to  the  meanest  citizen — that 
chaos  has  no  place  in  our  system,  and  that  we  have  the  will 
and  the  power  to  reduce  to  obedience  every  refractory  element ; 
and  that  the  strongest  of  all  governments  is  that  in  which 
each  citizen  has  an  equal  share,  and  is  an  equal  partaker  in  the 
advantages  which  it  secures. 

The  first  sentiment  developed  toward  us  is  that  of  respect. 
Close  upon  that  follows  confidence  in  our  material  and  financial 
condition.  We  have  provoked  a  spirit  of  inquiry  which  can- 
not be  set  at  rest.  We  no  longer  lack  friends  to  sympathize 
with  us,  but  hosts  are  coming  forward  to  share  our  burdens 
and  our  prosperity.  Our  securities  arc  eagerly  sought  for  in- 
vestment, particularly  on  the  Continent,  at  the  same  time  that 
a  new  impulse  is  given  to  emigration  to  our  shores.  The  inter- 
est felt  in  us  in  Germany  cannot  be  better  described  than  by 


54 


giving  an  extract  from  a  letter  received  from  Frankfort-on-the- 
Maine,  where  a  large  number  of  capitalists  was  recently 
addressed  by  our  citizen,  Mr.  Lanier,  whose  remarks  have 
been  circulated,  by  our  Consuls,  throughout  Europe.     It  says : 

'  Gold  or  paper  dollar  is  the  question  which  agitates  the 
German  press  and  financiers.  The  more  they  discuss  your 
financial  prospects,  the  more  they  invest  in  your  securities. 
On  all  'Changes,  the  transactions  in  them  are  enormous.  Since 
the  receipt  of  the  President's  Message  and  the  Report  of  the 
Secretary  of  the  Treasury,  the  United  States  securities  rule 
the  market,  almost  to  the  exclusion  of  every  other  loan.  The 
Wirtemberg  official  paper  has  brought  out  a  long  article  warn- 
ing the  excessive  investment  in  your  bonds  ;  over  100,000,000 
of  guilders  having  been  invested  in  them,  to  the  detriment  of 
other  interests.  But  to  the  disappointment  of  the  Govern- 
ment, your  bonds  next  day  rose  two  per  cent. — the  Liberal 
press  taking  the  ground  that  the  people  could  do  nothing 
better  than  invest  in  American  securities,  as  the  safest  loan 
offered  in  an  age.  These  bonds  are  the  most  powerful  and  in- 
fluential emissaries  you  could  have  sent  over  to  the  Old  Conti- 
nent, to  convert  the  masses  to  republican  principles.  They 
never  before  heard  so  much  talk  about  America ;  your  means 
and  resources,  your  future  and  your  prospects,  are  discussed 
everywhere,  and  in  such  favorable  terms  that  emigration  is  the 
leading  topic  among  the  sturdy  masses ;  and  the  next  year 
will  bring  you,  for  every  $1,000  of  your  bonds  taken  in  Ger- 
many, at  least  one  of  her  industrious  sons.' 

A  similar  feeling  is  rapidly  developing  itself  towards  us  in 
England,  as  shown  by  the  operations  of  the  London  Stock 
Exchange.  Our  securities  are  constantly  forcing  their  way 
there,  in  spite  of  the  efforts  of  the  Bank  of  England  and  of 
the  public  press  to  decry  their  value,  and  to  point  out  the 
danger  to  that  country  from  a  large  investment  in  them. 


oo 


Such  a  result  is  not  only  most  gratifying  to  our  national 
pride,  but  is  the  proper  reward  of  our  efforts  and  successes, 
and  proper  homage  to  our  national  character.  It  is  due  very 
largely  to  a  public  spirited  gentleman  who  has  visited  Europe 
for  the  purpose  of  placing  before  the  people,  there,  the  ground 
and  method  of  our  strength  and  prosperity,  and  who  supplied 
the  data  by  which  foreigners  themselves  could  arrive  at  satis- 
faetory  conclusions  in  reference  to  them.  His  success  was 
complete.  The  sentiment  everywhere  felt  toward  us  is  all  we 
could  wish.  It  has  increased  enormously,  not  only  our  politi- 
cal influence  and  power,  but  it  goes  far  to  solve  any  financial 
embarrassments  that  might  threaten.  The  way  being  pre- 
pared, should  it  be  thought  advisable,  we  could  have,  any 
day,  a  draft  upon  Europe  honored  for  almost  any  amount. 
The  object  of  the  bill  now  in  the  hands  of  the  Committee  of 
Ways  and  Means  is  to  place  such  powTer  in  the  hands  of  the 
Secretary  of  the  Treasury,  should  its  exercise  ever  be  deemed 
to  be  expedient.  It  is  not  probable,  however,  that  any  such 
necessity  will  occur.  Our  own  people  are  abundantly  able  to 
absorb  all  our  securities,  while  the  amounts  going  abroad,  daily, 
will  fully  equal  all  we  should  wish  to  see  placed  in  foreign 
hands.  Our  military  successes,  together  with  the  material 
strength  we  have  displayed,  have  settled  our  financial  difficul- 
ties ;  and  though  these  have  in  times  past  been  great,  every 
day  lessens  the  burdens  they  impose." 

In  1868,  being  again  about  to  leave  for  Europe,  I  received 
from  the  Treasury  Department  the  following  commu- 
nication : 

Treasury  Department, 


try  Department,  ) 
April  20,  1868.       \ 


Dear  Sir — Understanding  that  you  are  about  visiting 
Europe,  I  take  the  liberty  of  requesting  that  you  will,  as  a 
friend  of  the  Department  and  as  a  representative  of  it  without 
compensation,  avail   yourself  of  such  opportunities  as  may  be 


56 


presented  to  you  to  ascertain  what  is  the  sentiment  of  capital- 
ists in  regard  to  United  States  securities  ;  what  would  be  the 
prospect  of  negotiating  a  five  per  cent,  loan — principal  and 
interest,  by  express  provision  of  law,  payable  in  coin  ;  and 
whether  or  not  such  bonds  could  be  exchanged,  at  par,  for  the 
Five-Twenty  six  per  cents  now  held  in  Europe  ? 

I  will  thank  you  also  to  make,  from  time  to  time,  such  sug- 
gestions as  you  may  think  proper  in  regard  to  the  finances  of 
the  United  States,  and  the  best  steps  to  be  taken  to  place  the 
credit  of  our  securities  on  the  most  satisfactory  basis. 

With  many  thanks  for  the  very  valuable  service  rendered 
by  you  to  the  Government  when  you  were  last  in  Europe, 

I  remain,  very  truly, 

Your  ob'd't  servant, 

(Signed)     H.  McCulloch, 
J.  F.  D.  Lamer,  Esq.,  Secretary  of  the  Treasury. 

New  York. 

My  health  during  this  visit  to  Europe  was  such  that  I  could 
not  give  the  attention  to  the  requests  in  the  foregoing  letter 
that  I  desired.  I,  however,  caused  the  remarks  I  had  made  at 
Frankfort  on  a  previous  visit,  to  be  re-printed,  with  some 
additional  matter,  and  circulated,  widely,  through  the  Consu- 
lates and  other  channels.  I  also  conferred,  sufficiently,  with 
leading  bankers  abroad  to  satisfy  myself  that,  in  a  compara- 
tively short  period,  a  five  per  cent,  long  bond,  payable,  princi- 
pal and  interest,  in  gold,  in  New  York,  could  be  made  to  take 
the  place  of  the  six  per  cents,  outstanding,  and  without  loss 
to  the  Government — which  conviction  I  communicated  to  the 
Seci-etary  of  the  Treasury.  Everything  that  has  since  tran- 
spired has  tended  to  confirm  such  conviction. 

At  the  close  of  the  war  it  was  estimated  that  the  funded 
debt  of  the  Government,  when  all  the  outstanding  claims 
should  be  included,  would  reach  $3000,000.000.     It  would 


.>. 


have  reached  this  amount,  but  for  the  vast  sums  which  our 
immense  revenues  enabled  us  to  pay.  At  the  close  of  the 
fiscal  year  of  1866,  the  ascertained  debt  amounted  to> 
$2,784,073,379.  F>y  the  statement  made  March  1,  1870 
and  the  last  made  previous  to  the  preparation  of  this  sketch, 
it  amounted  to  $2,164,390,318,  as  follows: 

Debt  bearing-  coin  interest $2,107,939,650 

Debt  bearing  currency  interest L-24,012,320 

Debt  bearing  no  interest 440,442,857 

Debt  matured  and  not  presented  for  payment. . .  o,!)73,346 

Total  debt $2,676,368,173 

Less  in  the  Treasury  : 

Coin $102,400,739 

Currency : 10,280,746 

Bonds  purchased 99,287,800 

$211,968,285 

Debt  less  cash  and  bonds $2,464,399,888 

Of  the  debt  bearing  currency  interest,  $61,157,320  is  for 
bonds  issued  on  account  of  the  Pacific  Railroads,  and  which 
were  issued  subsequently  to  July  1,  1866.  Deducting  these 
from  the  above  statement  the  total  will  be  $2,399,120,028, 
or  $381,653,351  less  than  it  was  three  years  and  eight  months 
previous.  The  rate  of  payment  has  exceeded  $100,000,* mid 
annually. 

The  average  market  value  of  the  6  per  cent.  1881  bonds 
of  the  Government,  in  1861.  was  110 ;  that  of  gold,  for  the 
same  year,  220.  The  value  of  the  bonds  in  1865  equaled 
106  per  cent. ;  that  of  gold  138.  The  market  value  of  the 
1881  bonds  on  the  10th  of  March,  1870,  equaled  111;  that 
of  gold,  111.  These  figures  express,  better  than  any  lan- 
guage, the  rapidity  with  which  the  credit  of  the  Govern- 
ment has  appreciated. 

Since  the  close  of  the  war   I  have  not  taken   any  active 
part  in  public  affairs,  but  have  devoted  myself  to  banking — 
a  business  which  our  house  has  followed  for  the  past  fifteen 
8 


58 


years.     We  have  retained  a  connection  with  several  of  the 
enterprises  which  we  helped  into  existence,  and  have  fre- 
quently extended  to  them  aid  in  their  financial  affairs.     I 
am  a  business  man,  from  taste  as  well  as  from  long  habit. 
The  period  of  my  business  life  has  probably  been  the  most 
remarkable  one  in  all  history.     Steam  was  first  successfully 
applied  to  locomotion  in  the  latter  part  of  1829 — only  forty 
years  ago !     Since  then  the  progress  made  in  the  physical 
sciences  and  in  the  material  prosperity  of  the  world  has  been 
beyond  all  precedent.     The  most  sanguine  imagination  could 
not  have  pictured  one-half  the  results  that  have  been  realized. 
The  Electric  Telegraph  followed  speedily  upon  the  inven- 
tion of  the  railroad,  as  the  necessary  condition  to  the  high- 
est value  of  this  wonderful  contrivance.    In  this  short  period 
50,000  miles  of  railroad  have  been  opened  in  the  United 
States.     A  great  and  unbroken  line  extends  across  the  Con- 
tinent from  ocean  to  ocean,  traversing,   without  inconven- 
ience or  interruption,  the  most  formidable  mountain  bar- 
riers.    The  terminus  of  this   line  upon  the  western  slope 
of  the  Continent,  the  City  of  San  Francisco,  now  contain- 
ing 200,000  people,  existed  only  in  name  when  I  removed 
from   Indiana  to   New  York.     The   railroad,    everywhere, 
has   become   the  common   highway   of  the   people.      Nor 
have  other  countries,  though  far  distanced  by  our  own,  been 
idle  in  the  great  race  of  social  and  material  progress.     The 
same  year  that  witnessed  the  completion  of  the  Pacific  Kail- 
road  has  also  been  distinguished  by  the  opening  of  a  ship 
canal  from  the  Mediterranean  to  the  Eed  Sea,  thus  realizing 
the  dreams  and  hopes  of  the  merchant,  as  well  as  the  great 
rulers,  for  thousands  of  years.     At  the  moment  that  this  is 
being  written,  the  great  pageant  of  the  opening  of  this  new 
highway,  which  shortens  by  thousands  of  miles  the  routes  to 
the  Indias,  is  reported  to  us,  word  by  word,  as  it  proceeds, 


59 


by  line*  of  telegraph  wholly  submerged  beneath  the  **a! 
/he  Period  which  embraces  my  business  hfe  has  been  one  of 
intense  activity,  and  of  wonderful  and  beneficent  acluevc- 
Lents;  and  itl  a  source  of  the  highest  grautude  and  sa^- 

faction  to  me  to  have  witnessed  the  great  movement    ha 
have  taken  place,  and  to  have  been  iden  .tied  with  then 
progress.     I  hope  my  children  will  be  equally  fortunate  and 
Lppy  by  being  equally  fevored  with  oportumttes  or  use  „ 
and  valuable  labor,  and  to  see,  as  I  have  seen,  the  fait  of  ,t 

spring  up  on  every  hand. 

I  now  conclude  this  brief  sketch  of  some  of  the  leading 
events  of  my  life.     Although  I  have,  throughout,  been  an 
active  business  man,  I  have  been  subject  to  bat  tew  vicissi- 
tudes of  fortune.     I  have  been  almost  uniformly  successful. 
I  have,  as  a  role,  enjoyed  excellent  health.     For  aU  these 
blessings,  bestowed  by  a  kind  Providence,  I  am,  I    rust, 
truly  grateful.     It  haa  been  my  good  fortune  not  only  to 
have  had  .a  wide  acquaintance  with  the  leading  men,  and 
with  various  portions  of  this  country,   but  to  visit  other 
lands,  to  return  from  them  only  to  value  more  highly  our 
people  and  our  own  institutions.     As  I  grow  in  years  the 
Lie  am  I  drawn  to  my  family  and  children.     I  trust  that 
my  example  will  not  be  without  its  uses  in  teaching  my 
children  the  worth  of  industry  and  prudence  m  whatever 
walk  of  life  they  may  find  themselves  cast,     They  may  be 
assured  that  with  these  qualities,  joined  to  integrity  of  char- 
acter, they  can  never  be  unhappy,  and  never  be  without  a 
reasonable  share  of  tins  world's  goods,  nor  without  the  con- 
fidence and  respect  of  their  fellow-men. 


60 


THE  LATE  RICHARD  H.  WINSLOW. 

[From  the  American  Railroad  Journal,  March  2,  1861.] 

This  gentleman,  so  well  known  in  the  business  circles  of  this 
city,  and  for  many  years  a  leading  mind  in  the  great  move- 
ment that  covered  our  country  with  railways,  died  at  his  resi- 
dence at  Westport,  Connecticut,  on  the  14th  ult.  He  was 
born  at  Albany  about  fifty-five  years  ago,  and  was  a  direct 
descendant  of  Governor  Winslow,  of  Plymouth  Colony.  He 
came  to  New  York  about  thirty  years  since,  and  immediately 
went  into  business  in  Wall  street.  His  prominence,  however, 
as  a  public  man,  commenced  with  the  great  railway  era  of  the 
country,  which  almost  immediately  followed  the  discovery  of 
California.  On  the  1st  of  January,  1849,  he  formed  a  copart- 
nership with  J.  F.  D.  Lanier,  Esq.,  many  years  a  resident  of 
the  West,  and  who  brought  to  the  firm  not  only  all  the  quali- 
ties that  can  command  affection  and  respect,  but  a  very  wide 
and  intimate  knowledge  of  the  public  men,  and  the  wants  and 
resources  of  the  West.  Mr.  Lanier  brought  with  him  the  first 
Western  Railroad  bond  ever  offered  in  this  market,  and  the 
firm  soon  turned  its  attention  to  the  negotiation  of  this  kind 
of  securities.  -  At  that  time,  Western  railroads  hardly  existed, 
oven  in  idea.  There  were  no  precedents  to  inspire  confidence 
or  to  guide  in  framing  a  system  or  plan  for  presenting  these 
enterprises  to  the  public.  Before  anything  could  be  accom- 
plished a  favorable  opinion  had  to  be  created — a  formidable 
undertaking  where  monetary  co-operation  was  to  be  secured. 
For  this  office  Mr.  Winslow  was  peculiarly  fitted.  He  was  a 
man  whose  earnest' convictions  and  great  energy  seldom  failed 
to  impress  his  own  views  upon  all  with  whom  he  came  in  con- 
tact. The  commencement  made  by  the  firm,  however,  was  in 
a  very  small  way.  It  was  compelled  to  take  a  portion  of  loans 
ottered,  and  divide  the  balance  among  a  very  limited  circle ; 
the  firm,  even  in  such  cases,  being  frequently  called  upon  to 
guarantee  prompt  payment  of  interest  on  the  loans.  The 
bonds  of  the  Madison  and  Indianapolis  Railroad  were  first 
brought  out,  followed  by  those  of  the  Little  Miami,  Columbus 
and  Xenia,  Cleveland,  Columbus  and  Cincinnati,  Lake  Shore, 
and  other  Western  railroads.  The  immediate  success  of  these 
works  fully  vindicated  the  representations  made  in  reference 
to  them,  and  realized  large  profits  to  the  purchasers  of  their 
securities.      Thenceforward  the  operations  of  this  firm  were 


t;i 


distinguished  rather  for  their  magnitude  than  for  the  difficul- 
ties to  be  surmounted.  For  several  years  nearly  every  loan 
brought  upon  the  market  was  proffered  it,  securing  to  it  a  se- 
lection of  the  best  offered.  In  a  short  time  its  operations  ex- 
tended to  almost  every  State  in  the  Union  where  railroads 
■were  in  progress,  and  a  very  long  list  of  our  best  paying  pro- 
jects might  be  named,  for  the  construction  of  which  this  firm 
was  instrumental  in  securing  the  means.  So  thoroughly  had 
this  firm  become  established  in  public  confidence,  that,  in  the 
years  of  1852,1853  and  1854,  it  was  no  unusual  affair  for  it 
to  make  negotiations  equaling  $1,000,000  in  a  single  day  ; 
while  sales  Varying  from  $100,000  to  $500,000  a  day  were' of 
common  occurrence.  In  1852,  the  firm  was  enlarged  by  the 
addition  to  it  of  Mr.  James  Winslow,  brother  of  the  deceased. 

Considering  the  immense  number  of  securities  negotiated, 
the  firm  was  very  fortunate  in  the  enterprises  selected.  This 
was  in  a  great  measure  due  to  Mr.  Lanier,  whose 
thorough  and  intimate  acquaintance  with  the  West  enabled 
him  to  foresee  with  great  accuracy  the  works  likely 
to  be  successful.  Nearly  all  the  securities  negotiated 
have  had  their  interest  promptly  paid,  while  many  of  them 
rank  among  the  very  first  class.  This  firm  were  also  the  first 
to  introduce  County  bonds  of  the  State  of  Ohio  upon  this  mar- 
ket, and  negotiated  the  greater  portion  of  these,  which  are 
still  regarded  as  one  among  the  most  reliable  Western  secu- 
rities. 

After  1854  the  firm  gradually  withdrew  from  railway  nego- 
tiations and  confined  itself  almost  entirely  to  banking,  in 
which  it  transacted  a  large  business.  About  eighteen  months 
since  Mr.  Winslow  retired  from  it  on  account  of  his  health 
which  continued  steadily  to  decline  till  his  decease. 

What  these  gentlemen  actually  accomplished,  however,  is 
to  be  looked  for  in  the  results  rather  than  in  the  magnitude  of 
their  operations.  The  credit  they  early  established  for  West- 
ern securities,  spread  till  it  extended  over  the  whole  of  Europe 
as  well  as  of  this  country.  The  capital  of  both  was  freely 
proffered  to  our  enterprises.  A  similar  spectacle  was  never 
seen.  Railroads  were  commenced  simultaneously  in  every 
part  of  the  Union,  and  in  the  decade  just  closed  l'5,000  miles 
were  constructed.  In  one  or  two  years  4,000  miles  were 
opened  each  year.  The  whole  system  sprang  as  if  by  magic 
into  existence,  stretching  from  Quebec,  in  Canada,  to  New  Or- 
leans, 2,500  miles  apart,  and  from  the  eastern  part  of  Maine  to 
the  western  part  of  Kansas,  penetrating  every  portion  of  our 
wide  domain.     The  whole  of  Europe  has  yet  hardly  construct- 


62 


ed  the  extent  of  mileage  opened  in  the  United   States  within 
the  past  ten  years. 

The  commerce  of  a  country  like  the  United  States  is  mainly 
a  creation  of  its  public  works,  as  these  are  essential  to  give  a 
commercial  value  to  the  products  of  the  interior.  A  person 
who  provides  the  means  for  the  construction  of  a  railroad  is  a 
public  benefactor.  Its  results  are  the  measure  of  good  he 
has  accomplished.  But  such  persons  are  often  the  unseen 
spring  in  the  mechanism,  while  the  one  who  superintends  the 
execution  of  a  single  piece  of  the  work  becomes  the  conspicu- 
ous object.  But  for  the  former,  the  latter  could  have  had  no 
function  or  name.  Now  if  we  take  the  results  that  followed 
the  efforts  of  the  pioneers  in  the  great  railway  movement,  we 
shall  have  nothing  in  history  to  compare  with  them.  In  the 
Western  States,  where  these  have  been  the  most  conspicuous, 
there  are  now  10,500  miles  of  railroad,  constructed  at  a 
cost  of  -$400,000,000,  carrying  freight  to  the  amount  of 
7,500,000  tons  annually,  and  having  a  value  of  at  least 
$500,000,000.  The  population  of  these  States  increased  from 
4,721,554  in  1850,  to  7,797,528  in  1860,  or  at  the  rate  of  about 
seventy  per  cent.  Their  wealth  is  increased  in  three-fold  ratio. 
First-class  cities  have  sprung  into  existence,  and  the  whole  face 
of  the  country  presents  the  scene  of  a  numerous,  active  and 
thriving  population,  with  a  vast  commerce,  nearly  all  the  cre- 
ation of  its  public  works. 

In  the  Eastern  States,  the  most  striking  effect  of  these  works 
is  seen  in  the  progress  in  population  and  commerce  of  the  city 
of  New  York.  The  population  of  this  city  and  its  environs 
has  increased  from  645,000  in  1850,  to  1,155,000  in  1859.  Its 
exports,  in  1850,  were  $47,580,357;  in  1859,  $146,683,450. 
Its  imports,  in  1850,  were  $116,667,558  ;  in  1859,  $229,408,130. 
Its  wealth  in  the  same  time  has  more  than  trebled.  This  ad- 
vance is  the  real  measure  of  the  results  of  the  construction  of 
Western  railroads,  as  New  York  has  reaped  the  same  advan- 
tage as  if  each  had  been  constructed  for  its  particular  beneiit. 

Such  results,  the  firm  of  which  Mr.  Winslow  was  an  active 
member  was  greatly  instrumental  in  achieving,  and  it  is 
proper  that  the  occasion  of  his  decease  should  not  be  passed  by 
without  a  reference  to  them,  as  they  are  certainly  the  proud- 
est monument  ever  erected  to  the  memory  of  man. 


63 


SNOW-STORM  IN  THE  ALPS. 


The  following  account,  written  soon  after  the  events  de- 
scribed,  will  interest  my  children  in  showing  them  how  nar- 
rowly I  escaped  with  my  life,  in  a  great  storm  which  I  en- 
countered in  crossing  the  Alps  in  the  winter  season  : 

Gexoa,  Friday,  Jan.  23,  1863. 

I  left  Paris  on  Saturday.  I  had  an  agreeable  journey  by 
rail  to  San  Meichel,  at  the  foot  of  Mount  Cenis.  At  San  Mei- 
chel  we  were  transferred  to  sleio-hs,  or  rather  to  dilig-ences 
placed  on  runners.  A  3  P.  M.,  Sunday,  we  began  the  ascent  of 
the  mountain.  The  day  was  a  pleasant  one — calm,  with  sun- 
shine. We  reached  the  summit  about  12  1-2  o'clock  at  night 
— the  weather  still  continuing  calm  and  pleasant,  the  stars 
shining  brightly — and  we  congratulated  ourselves  on  the  pros- 
pect of  so  pleasant  a  passage  over  this  Alpine  region.  We  had 
descended  on  the  Italian  side  about  half  an  hour,  when  the 
wind  began  to  blow,  drifting  the  snow  across  our  route,  which 
impeded  our  progress.  As  we  continued  to  descend,  the  wind 
increased  in  violence,  making  it  more  and  more  difficult  for  us 
to  proceed. 

At  3  o'clock  in  the  morning,  having  reached  a  point  more 
than  half-way  down,  the  gale  became  teriffic,  roaring  like  a 
thousand  Niagaras,  dashing  and  whirling  the  hue  dry  snow  so 
as  to  darken  the  atmosphere. 

By  this  time  the  drifts  had  become  deep,  and  it  being  dark 
our  progress  was  stopped.  On  our  left  was  a  precipice  of  a 
thousand  feet  or  more  deep.  The  sleigh  next  in  front  of  ours 
had  upset  with  the  passengers,  and  was  only  prevented  going- 
over  the  precipice  by  its  lodging  in  the  soft  snow  within  a  few 
feet  of  the  edge.  The  conductor  now  came  and  told  us  we 
would  have  to  sit  in  the  sleigh  where  we  were,  until  daylight  ; 
that  he  must  seek  the  protection  of  the  lee  of  some  rock  with 
his  horses  to  save  himself  and  them  from  perishing  from  cold. 
This  announcement,  you  may  imagine,  was  anything  but 
agreeable  to  us.  Here  we  sat  until  about  9  o'clock  Monday 
morning. 

About  5  o'clock  we  heard  the  fall  of  an  avalanche  across  the 
road  before  us,  and  soon  after  the  fall  of  another  in  our  rear; 
this  greatly  increased  our  alarm,  as  we  did  not  know  what 
moment   another  would  sweep    us  over  the   precipice  in  its 


64 


course.  It  was  truly  a  night  of  horror.  After  daylight  we 
anxiously  awaited  the  return  of  the  conductor  to  know  our 
fate ;  he  came  after  9  o'clock  and  informed  us  that  he  would 
endeavor  to  draw  the  sleigh  a  little  nearer  the  avalanche,  to 
shorten  the  distance  we  should  have  to  walk  to  reach  it. 

We  had  advanced  hut  a  few  rods  when  we  came  to  a  stand, 
the  drifts  preventing  our  progress.  Our  only  chance  of  safety 
was  to  walk  to  the  "  Cantano,"  or  house  of  refuge,  ahout  four 
hundred  yards  off,  the  avalanches  fifteen  to  twenty  feet  deep 
and  more  than  one  hundred  wide,  lying  in  the  way.  Each  one 
had  to  take  care  of  himself. 

I  was  the  last  to  leave  the  sleigh.  With  difficulty  I  reached 
the  avalanche,  and  in  attempting  to  walk  over  it  I  sank,  half 
my  length, in  the  soft  snow.  I  became  completely  exhausted; 
the  terrible  wind  took  my  breath  away.  I  fell  on  the  snow, 
unable  to  speak  or  rise.  One  of  the  passengers  happened  to 
see  me  fall,  and  after  reaching  the  "  Cantano  "  sent  up  two  of 
the  Cantoniers,  who  carried  me  to  the  house  nearly  in  an  in- 
sensible state.  By  dint  of  rubbing  with  spirits  I  revived  in 
about  half  an  hour. 

The  storm  continued  with  unabated  fury  until  about  10 
o'clock  Tuesday  morning,  when  it  began  to  subside  a  little. 
In  the  afternoon  of  Tuesday,  the  chief  of  the  cantoniers,  an 
active,  energetic  fellow,  came  from  below  with  twentv-five  of 
his  men ;  these,  added  to  about  ten  at  the  "  Cantano,"  made 
thirty-five  men.  The  sleighs  having  been  brought  down,  the 
joyful  order  was  given  to  mount,  which  was  readily  complied 
with. 

At  this  place  I  made  the  acquaintance  of  the  Marquis 
DAzeglio,  the  Italian  Minister  at  the  British  Court,  then  on 
his  way  to  London.  At  his  request,  I  gave  him  a  copy  of  this 
letter,  which  he  said  he  would  lay  before  his  Government  of 
Turin,  that  they  might  consider  the  subject  of  providing  bet- 
ter accommodation  for  travelers  at  these  "  Cantanos." 

I  had  read  in  my  early  years  of  the  fury  and  power  of  these 
Alpine  storms ;  how  unfortunate  travelers  were  suddenly 
overtaken  and  lost  in  the  drifts  and  avalanches  of  snow,  but 
never  before  did  I  realize  them.  The  tunneling  of  Mount 
Cenis  is  progressing  as  fast  as  the  nature  of  the  case  admits 
of;  they  have  penetrated  about  one  mile  at  each  end;  the 
blasting  is  through  a  rock  of  the  hardest  kind ;  the  progress 
is  about  five  feet  a  day  at  each  end,  and  when  completed  will 
be  over  eight  miles  long.  The  completion  of  the  tunnel  is 
greatly  to  be  desired  ;  it  will  make  the  shortest,  most  direct, 
and  far  the  most  agreeable  route  from  Paris  to  Italy.  This 
work  is  being  done  by  the  Italian  Government. 


65 


Copies  of  letters  addressed  to  me  by  the  Hon.  Hugh  Mc- 
Culloch,  Secretary  of  the  Treasury,  and  Hon.  "William  H. 
Seward,  Secretary  of  State  of  the  United  States,  as  I  was 
about  leaving  for  Europe  in  1865. 

Treasury  Department, 
Washington,  May  29,  1865. 

Dear  Sir — Although  you  are  about  to  visit  Europe  for  the 
benefit  of  your  health,  and  desire  to  be  relieved  from  all  cares 
and  responsibilities,  I  cannot  permit  a  gentleman  of  your  dis- 
tinguished and  well-merited  reputation  as  a  financier  to  visit 
Europe,  without  asking  of  him  the  benefit  of  his  services  in 
explaining  to  Capitalists  in  that  country  the  condition  of  our 
financial  affairs,  and  in  giving  to  me  the  benefit  of  such  sug- 
gestions as  he  may  be  able  to  make  in  regard  to  the  condition 
of  American  credit  in  the  countries  he  may  visit,  and  in  the 
transaction  of  any  business  which  the  Treasury  Department 
may  wish  to  commit  to  his  care. 

I  inclose  herewith  a  statement  of  our  national  debt.  You 
are  well  advised  of  our  national  resources. 

I  will  thank  you,  while  in  Europe,  on  behalf  of  the  Treasury 
Department,  to  explain  the  character  of  this  debt  and  the  ex- 
tent of  the  resoui'ces  of  the  United  States,  to  gentlemen  with 
whom  you  may  come  in  contact,  and  who  may  be  interested 
in  these  subjects. 

I  will  from  time  to  time  communicate  with  you  upon  these 
subjects,  and  ask  of  you  to  perform  specific  duties,  if  I  should 
be  under  the  necessity  of  requiring  your  particular  services. 

Trusting  that  your  journey  will  be  a  pleasant  one,  and  that 
you  will  return  to  the  United  States  re-invigorated  by  relaxa- 
tion and  travel, 

I  am,  very  truly,  your  ob'd't  servant, 

f  (Signed)     H.  McCuxloch, 

J.  F.  D.  Lanier,  Esq.,  Secretary  of  the  Treasury. 

New  York. 


66 


Department  of  State, 
Washington,  2d  June,  1865. 

To  the  Diplomatic  and  Consular  Agents  of  the  United   States 
in  Europe  : 
Gentlemen — It  is  my  pleasing  duty  to  introduce  to  you 
J.  F.   D.   Lanier,  Esquire,  a  distinguished  banker  of  the  City 
of  New  York,  and  a  most  estimable  gentleman. 

Mr.  Lanier  has  been  requested  by  the  Secretary  of  the 
Treasury  to  look  after  the  financial  interests  of  this  Govern- 
ment while  in  Europe,  and  he  has  kindly  consented  to  do  so. 

I  commend  him  to  your  friendly  attention  and  considera- 
tion, and  bespeak  for  him  such  facilities  as  may  contribute  to 
the  effective  discharge  of  the  duties  confided  to  him. 
I  am,  gentlemen, 

Your  very  obedient  servant, 

(Signed)     William  H.  Seward, 

Secretary  of  State. 


B 

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■    ■    ■■ '    ':iV.,v  "M  ; 

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